Diesel Retrofits: Quantifying 

and Using Their Emission 

Benefits in SIPs and Conformity

Guidance for State and Local Air 

and Transportation Agencies
EPA-420-B-14-007, February 2014

Supersedes EPA-420-B-06-005

Transportation and Climate Division

Office of Transportation and Air Quality

U.S. Environmental Protection Agency

Diesel Retrofits: Quantifying 

and Using Their Emission 

Benefits in SIPs and Conformity

Guidance for State and Local Air 

and Transportation Agencies
3

SECTION 1: INTRODUCTION 6

1.1 What is the purpose of this guidance? 6

1.2 How can emission reductions from retrofit projects be used to meet SIP and conformity 

needs? 7

1.2.1 On-road and nonroad retrofit projects in SIPs 7

1.2.2 On-road retrofit projects in transportation conformity 8

1.2.3 Nonroad retrofit projects in transportation conformity 8

1.2.4 Retrofit projects in general conformity 9

1.3 What vehicles, engines, and equipment does this guidance address? 9

1.4 What is a retrofit project? 9

1.5 What are the requirements for using vehicle, engine, or equipment replacements in SIPs 

and conformity? 10

1.6 How does this guidance relate to the Voluntary Mobile Source Emission Reduction 

Program SIP guidance? 11

1.7 Can a state require retrofits of on-road and nonroad vehicles, engines, or equipment? 12

1.8 Does this guidance create any new requirements? 13

1.9 Who should I contact for additional information? 13

SECTION 2: QUANTIFYING RETROFIT EMISSION REDUCTIONS 14

2.1 How do you quantify emission reductions from retrofit projects? 14

2.2 What are MOVES and NMIM and why should they be used to quantify emission reductions 

from retrofits? 14

2.3 How should the data included in MOVES and NMIM be used when quantifying emission 

reductions from retrofits? 15

2.4 Can you use MOVES or NMIM to estimate emission reductions from retrofit projects for 

uses other than SIPs or conformity determinations? 16

2.5 How do you use MOVES2010b to quantify emission reductions from retrofit projects? 16

2.5.1 Pollutant 17

2.5.2 Pollutant Process 17

2.5.3 Fuel Type and Source Type 18

2.5.4 Initial Calendar Year and Final Calendar Year of Retrofit Implementation 18

2.5.5 Initial Model and Final Model Year Retrofitted 18

2.5.6 Fraction of Fleet Retrofit 18

2.5.7 Effectiveness of the Retrofit 19

2.6 How do you use MOVES to quantify emission reductions from vehicle or engine 

replacements? 20

2.7 How do you use NMIM to quantify emission reductions from nonroad retrofit projects? 21

2.7.1 Differences between “fleet specific” and “fleet wide” retrofit projects 21

2.7.2 The retrofit parameters 22

2.7.3 The fleet information parameters 23

2.8 How do you use NMIM to quantify emission reductions from vehicle, engine, or equipment 

replacements? 25
4

SECTION 3: USING EMISSION REDUCTIONS IN SIPS 27

3.1 What are the basic requirements for using emission reductions in SIPs? 27

3.1.1 Quantifiable - 27

3.1.2 Surplus - 27

3.1.3 Federally Enforceable - 28

3.1.4 Permanent - 29

3.1.5 Adequately Supported - 29

3.2 How can the estimated emission reductions be used for SIP purposes? 30

3.3 What would a state submit to EPA to meet the requirements for incorporating a retrofit 

project in a SIP? 31

3.4 Are there any other types of SIPs that could include emission reductions from retrofit 

projects? 31

3.5 What monitoring and record keeping should occur to document retrofit emission 

reductions? 32

3.5.1 What should the state air agency monitor and record? 32

3.5.2 How long should the state air agency maintain records? 32

3.6 What validation and reconciliation should occur for emission reductions in SIPs approved 

under the VMEP guidance? 33

3.7 What penalties can EPA impose for not complying with Clean Air Act requirements? 33

SECTION 4: USING EMISSION REDUCTIONS IN TRANSPORTATION CONFORMITY 

DETERMINATIONS 34

4.1 What is transportation conformity? 34

4.2 What kinds of retrofit projects can be used in transportation conformity determinations? 34

4.3 How can the emission reductions from on-road retrofit projects be included in 

transportation conformity determinations? 35

4.4 How can the emission reductions from nonroad retrofit projects be included in 

transportation conformity determinations? 36

4.5 How is EPA supporting the use of emission reductions from nonroad retrofit projects in 

transportation conformity? 37

4.6 What is a safety margin? 37

4.7 When can a safety margin be established in a SIP? 38

4.8 What are the benefits of establishing a safety margin at the time that an RFP SIP, 

attainment demonstration, or maintenance plan is initially submitted? 38

4.9 Why should an area start developing a safety margin now? 39

4.10 What are the features of a safety margin? 39

4.11 What is a trading mechanism? 40

4.12 When can a trading mechanism be established in a SIP? 41

4.13 Why develop a trading mechanism as a stand-alone SIP revision? 41

4.14 What would a SIP with a trading mechanism look like? 41

4.15 What are the features of a trading mechanism? 42

4.16 Does the public have the opportunity to comment on trading? 43

4.17 Are there any examples of transportation conformity-related trading mechanisms that 

were approved into the SIP? 43

4.18 Are there any other ways to establish a trading mechanism for a nonroad retrofit project? 

 44
5

4.19 How can I get additional technical assistance in using the emission reductions from a 

nonroad retrofit project in transportation conformity? 44

SECTION 5: USING EMISSION REDUCTIONS IN GENERAL CONFORMITY 

DETERMINATIONS 46

5.1 How can the estimated emission reductions be used for general conformity determinations? 

 46

5.2 How can retrofit projects be used to meet the general conformity requirements? 46

5.3 Is a SIP revision required if a source with a facility-wide emissions budget wants to 

implement a retrofit project at the facility? 47

5.4 What requirements would potentially limit the use of retrofit projects in the general 

conformity program? 48

5.5 Why are SIPs required for use of nonroad retrofits in transportation conformity but not 

required for general conformity? 48

APPENDIX A: 50

ESTABLISHING AND USING A SAFETY MARGIN TO ALLOW EMISSION REDUCTIONS 

FROM NONROAD RETROFITS TO BE USED IN TRANSPORTATION CONFORMITY 

DETERMINATIONS 50

A.1 What is an example of establishing and using a safety margin? 50

A.2 What is the most expeditious process for establishing a safety margin that results from a 

nonroad retrofit project? 51

A.3 Have any areas included safety margins in their SIPs? 53

APPENDIX B: 56

ESTABLISHING AND USING A TRADING MECHANISM TO ALLOW EMISSION 

REDUCTIONS FROM NONROAD RETROFITS TO BE USED IN TRANSPORTATION 

CONFORMITY DETERMINATIONS 56

B.1 What is an example of establishing and using a trading mechanism? 56

B.2 Does a trading mechanism have to be included in a SIP? 57

B.3 What is the most expeditious process for establishing a trading mechanism in a SIP, and 

how long will it take? 57

B.4 Has any state adopted a trading mechanism into its SIP this quickly? 59

APPENDIX C: 62

MODEL RULE FOR TRADING EMISSION REDUCTIONS FROM NONROAD RETROFIT 

PROJECTS FOR TRANSPORTATION CONFORMITY 62

 
6

SECTION 1: INTRODUCTION 

 

1.1 What is the purpose of this guidance?

Technology is available to reduce diesel vehicle and engine emissions in a cost-effective 

way. The ability to use diesel emission reductions for state implementation plan (SIP) and 

conformity purposes gives states and localities additional incentive to implement diesel retrofit 

projects. Diesel retrofit technologies reduce pollution from the existing diesel engine fleet by up to 

90% for particulate matter (PM), up to 75% for nitrogen oxides (NOx), and up to 90% for volatile 

organic compounds (VOCs). Many diesel retrofit projects are being successfully implemented 

around the country. Clean diesel projects already initiated are expected to result in approximately 

20,000 tons of particulate matter reduced over the life of the projects, with estimated public health 

benefits of about $5 billion. 

 The purpose of this document is to provide guidance on quantifying and using emission 

reductions from on-road and nonroad diesel vehicles, engines, and equipment that have been 

retrofitted with emission reduction technology. This guidance document describes how to quantify 

and use reductions of NOx, VOCs, PM2.5, PM10, and carbon monoxide (CO) in ozone, PM2.5, PM10, 

nitrogen dioxide (NO2), and CO nonattainment and maintenance areas. You can use the emission 

reductions resulting from implementing a retrofit project in a SIP to help achieve reasonable further 

progress (RFP), attainment of the national ambient air quality standard (NAAQS or “standard”), or 

maintenance of the NAAQS; and in transportation conformity and general conformity 

determinations. This guidance document is updated to reflect the new quantification procedures to 

use EPA’s latest on-road emissions model, the MOtor Vehicle Emissions Simulator (MOVES) 

model.1

 For nonroad emissions, the nonroad portion of the National MOBILE Inventory Model 

(NMIM) is the preferred way to estimate benefits of retrofit programs. State and local agencies 

developing SIPs and conformity analyses for California should consult with EPA Region 9 for 

information on the current version of EMFAC approved for use in California and for information on 

how to quantify emission reductions from retrofit projects.

 Retrofit projects provide a unique and cost-effective opportunity for state and local 

governments to reduce pollution from on-road and nonroad diesel vehicle and equipment fleets, and 

as a result, could assist areas in attaining the NAAQS. The current transportation law, Moving 

Ahead for Progress in the 21st Century (MAP-21), continues to provide federal funding for on-road 

retrofits under the Congestion Mitigation and Air Quality Improvement Program (CMAQ), and 

funding for diesel retrofit projects.

2

 MAP-21 recognizes the importance of diesel retrofit projects 

and other mobile source emission reduction strategies and directs states and metropolitan planning 

organizations (MPOs) to give priority for use of CMAQ funds for projects that reduce fine 

particulate matter emissions, including diesel retrofits in PM2.5 nonattainment and maintenance areas. 

The law also notes that states and MPOs continue to have final CMAQ project selection authority. 

 

1 The previous version of this document, EPA420-B-06-005, was released in June 2006. Today’s version supersedes the 

previous document. 2 23 U.S.C 149(b)(8) 
7

 This guidance also fulfills the directive from the Energy Policy Act of 20053 that requires 

EPA to provide SIP guidance for retrofit projects under the diesel emission reduction provision (also 

known as “DERA”) and takes the additional step of providing guidance for crediting retrofits in 

conformity determinations. In addition to assisting MPOs and states in evaluating diesel retrofits for 

CMAQ project selection, we anticipate that this guidance will also be useful for implementing the 

DERA program. DERA authorizes federal funds for retrofit projects that reduce diesel emissions 

from existing engines.

 This guidance is focused on quantifying emission reductions from diesel retrofits for SIP and 

conformity purposes and therefore has an intended audience of air quality and transportation 

planners. Other audiences can use this guidance for quantifying emissions reductions for non-SIP or 

conformity purposes by reading Section 1 for background and referring to Section 2 of the guidance 

for quantifying emission reductions. This guidance document is written for current and future 

NAAQS as well as current and future versions of MOVES. EPA will re-evaluate the applicability of 

this guidance as needed.

1.2 How can emission reductions from retrofit projects be used to meet SIP and 

conformity needs?

 This guidance is intended to facilitate the development of retrofit projects as a cost-effective 

way to achieve needed emission reductions while ensuring that these projects meet SIP and 

conformity requirements. This document describes several different options for the use of emission 

reductions from retrofit projects to meet both near term and longer term SIP and conformity needs. 

State and local air and transportation agencies should work together to determine how 

reductions from diesel retrofits should be used given local air quality needs. The interagency 

consultation process can also be used to identify retrofit projects to implement for future SIP or 

conformity needs. If those reductions are used in the near term for conformity, then state and local 

agencies should work together to determine what additional retrofit projects could be implemented 

to meet any additional air quality needs. 

 Under any of the options highlighted below, it is in the best interests of state and local 

agencies to act as quickly as possible to get retrofit projects in place. Retrofit projects will provide 

their greatest benefits in the near term, while significant numbers of vehicles, engines, and 

equipment built before EPA’s 2007/2010 on-road and 2008 nonroad standards remain in the fleet. 

1.2.1 On-road and nonroad retrofit projects in SIPs 

 One option is to use retrofit reductions to help demonstrate RFP, attainment, or maintenance 

 

3 See Energy Policy Act of 2005, Title VII, Subtitle G (sections 791 to 797) at 

http://www.epa.gov/oust/fedlaws/epact_05.htm
8

in upcoming SIP submissions. On-road and nonroad retrofit projects are subject to the same SIP 

requirements as any other control measures. This guidance document provides the necessary 

information to include retrofit projects in a SIP, including a calculation method that ensures that 

emission reductions calculated for the retrofit project are consistent with the rest of the SIP. State 

and local agencies can include these retrofit projects in the SIPs being developed to meet the 

applicable NAAQS, but they will want to consider implementing them as soon as possible to ensure 

the maximum available reductions from the retrofit projects. General SIP requirements for retrofit 

projects are described in Section 3 of this document. 

1.2.2 On-road retrofit projects in transportation conformity 

Alternatively, state and local agencies could also use on-road retrofit projects to meet 

transportation conformity requirements now or in the future with little additional effort beyond what 

is required to properly implement the project and quantify the emission reductions. These 

reductions could be incorporated into a transportation conformity determination without 

making any change in the SIP. Section 4.3 of this document explains this process. 

1.2.3 Nonroad retrofit projects in transportation conformity

 This document also provides guidance on options for using reductions from nonroad retrofit 

projects in regional emissions analyses for transportation conformity determinations (see Section 4). 

These options require a SIP revision before they can be implemented. One option, adding a 

safety margin to the SIP, could be implemented in the context of the process of developing a new 

SIP to meet an applicable NAAQS. SIP safety margins have been implemented and used to meet 

transportation conformity requirements many times in the past. We have provided detailed 

information on how this option works in Section 4 and Appendix A. 

 Another option for using the nonroad retrofit reductions in transportation conformity 

determinations is to include a trading mechanism in the SIP. This can be done as a SIP prior to the 

completion of an RFP or attainment SIP. We have provided detailed information on how to 

implement a trading mechanism as a SIP in Section 4 and Appendix B. To help reduce the time 

needed to develop, submit and approve a trading mechanism SIP, we have provided a model trading 

rule in Appendix C. States that adopt this rule without significant revisions could expect an 

expedited approval by EPA. 

 EPA also notes that reductions from retrofits can be applied as mitigation measures in 

quantitative PM2.5 or PM10 hot-spot analyses for project level conformity determinations. The 

methodology in Section 2 of this guidance can be used for such analyses. For further background on 

PM hot-spot analyses, see EPA’s Transportation Conformity Guidance for Quantitative Hot-spot 

Analyses in PM2.5 and PM10 Nonattainment and Maintenance Areas at 

www.epa.gov/otaq/stateresources/transconf/projectlevel-hotspot.htm#pm-hotspot 
9

1.2.4 Retrofit projects in general conformity 

 Finally, this guidance also provides information on the use of retrofit reductions to meet 

general conformity requirements (see Section 5). The use of nonroad retrofit reductions in 

general conformity does not require a SIP revision.

1.3 What vehicles, engines, and equipment does this guidance address?

 This guidance focuses on emission reductions from heavy-duty on-road and nonroad diesel 

vehicles, engines, and equipment, and fuels.4 This guidance excludes locomotive and marine 

applications because they are not currently contained in NMIM. New emission standards, enacted in 

2001, affected all on-road heavy-duty highway vehicles and engines, starting in 2007 model year, 

with an additional set of NOx requirements beginning in 2010. Tighter emission standards 

(Nonroad Tier 4) were phased in for 2008 and future model year nonroad engines. Ultra-low sulfur 

diesel fuel (15 ppm sulfur content) was required for on-road use beginning in October 2006. For 

nonroad vehicles, engines, and equipment, low sulfur diesel fuel (500 ppm sulfur content) was

required beginning in 2007, with ultra-low sulfur diesel fuel required beginning in 2010. In general, 

this guidance applies to the retrofit of vehicles, engines, and equipment manufactured before those 

standards took effect and that will not have to comply with EPA’s 2007/2010 on-road and 2008 

nonroad regulations. This guidance document can be used, however, for emission reductions from 

retrofits of post-2007/2010 and post-2008 vehicles, engines, and equipment if such activities meet 

the definition of “retrofit” discussed below. 

1.4 What is a retrofit project?

 For the purpose of this guidance only, a “retrofit project” is defined broadly to include any 

technology, device, fuel, or system that when applied to an existing diesel engine achieves emission 

reductions beyond that currently required by EPA regulations at the time of its certification. 

Therefore, for those existing vehicles, engines, or equipment that will not have to comply with 

EPA’s 2007/2010 heavy-duty on-road and 2008 nonroad standards, any additional emission 

reduction beyond the current regulation of these vehicle, engine, or equipment emission levels is 

considered a retrofit project. These technologies may include, but are not limited to, the following: 

• EPA “verified” emission control technologies (for example, oxidation catalysts and PM

filters and upgrade kits5

) 

 

4 On-road sources include vehicles used on roads for transportation of passengers and freight. These sources are also 

sometimes referred to as highway sources. Nonroad sources include vehicles, engines, and equipment used for 

construction, agriculture, nonroad transportation, recreation, and many other purposes. These sources are also 

sometimes referred to as off-road sources. Within these broad categories, on-road and nonroad sources are further 

distinguished by size, weight, use, and/or horsepower.

5 For a complete list of all EPA verified technologies, consult the list at the following web site: 

http://www.epa.gov/cleandiesel/verification/verif-list.htm . Any diesel fuel and/or diesel fuel additive included on 
10

• California’s Air Resources Board (CARB) “verified” emission control technologies (see 

paragraph below) 

• EPA certified engines6 as engine replacements (see Section 1.5) 

 Technologies that have not been verified by EPA or CARB and operational strategies are 

beyond the scope of this guidance document. 

 In 2004, EPA signed a Memorandum of Agreement (MOA)7 with CARB to coordinate the 

verification of diesel retrofit technologies. This MOA commits the agencies to establish reciprocity 

in verification of hardware or device-based retrofits, and further establishes our joint commitment to 

cooperate on the evaluation of retrofit technologies. This agreement commits EPA and CARB to 

accept each other’s verification of the amount of PM and NOx reduced by a particular retrofit 

technology. Currently, EPA accepts CARB verified technologies, and CARB accepts EPA verified 

technologies. Additionally, as retrofit manufacturers initiate and conduct in-use testing, both 

agencies agreed to coordinate this testing so data generated may satisfy the requirements of both 

agencies. This MOA is intended to expedite the verification and introduction into the market of 

innovative emission reduction technologies. Additionally, this MOA reduces the effort needed for 

retrofit technology manufacturers to complete verification.

The verification of diesel technologies is specific to particular types of vehicles, engines, or 

equipment as defined in the “applicability” section of the EPA and CARB verified technology lists. 

Verified retrofit technologies can be applied only to the vehicles, engines, or equipment specified in 

those lists. For example, a technology that has been verified for on-road vehicles will not 

necessarily be suitable for nonroad vehicles, engines, or equipment unless it is also been verified for 

such use. 

1.5 What are the requirements for using vehicle, engine, or equipment

replacements in SIPs and conformity?

 In addition to the EPA and CARB verified retrofit technologies, this guidance also applies to 

the use of EPA certified engines as engine replacements,

8 or the early replacement of older vehicles 

or equipment (e.g., bulldozers) with cleaner vehicles or equipment. Emission reductions that result 

from vehicle, engine, or equipment replacements that would have occurred through normal attrition 

 

EPA’s list or verified technologies is required to be registered in accordance with regulations at 40 CFR 79, Registration 

of Fuels and Addititives. An engine upgrade kit consists of parts (e.g., turbo charger, fuel injector, pistons, etc) that are 

used to rebuild an older engine to an engine configuration which is certified to meet more stringent current federal 

emissions standards. 

6 For a complete list of all EPA certified large on-road and nonroad engines, consult the list at the following web site: 

www.epa.gov/otaq/certdata.htm. 7 The MOA is at the following web site: http://www.epa.gov/cleandiesel/documents/epa-arb_moa.pdf. The CARB 

verified technology list can be found here: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm. 8 Engine replacement is sometimes referred to as an engine “repower;” EPA uses only the term “replacement” in this 

guidance.
11

are considered to be the result of normal fleet turnover and are not addressed by this guidance. The 

effects of fleet turnover are already included in the MOVES and NMIM/NONROAD models. 

Furthermore, the purchase of new vehicles or equipment to expand a fleet is not covered by the 

guidance. To be considered a replacement, the purchase of new vehicles, engines, and equipment 

would need to be accompanied by the scrappage of old vehicles, engines, and equipment and occur 

before normal attrition. 

 To be able to use emission reductions from any replacements in a SIP or in a conformity 

determination, the following statements would apply: 

• The vehicle, engine, or equipment being replaced would be scrapped (permanently disabled or 

destroyed), or the replaced engine would be returned to the original engine manufacturer for 

remanufacturing to a cleaner standard.

• The replacement vehicle, engine, or equipment would perform the same function as the 

vehicle, engine, or equipment that is being replaced (e.g., an excavator used to dig pipelines 

would be replaced by an excavator that continues to dig pipelines). 

• The replacement vehicle, engine, or equipment would be of the same type and similar gross 

vehicle weight rating or horsepower as the vehicle, engine, or equipment being replaced (e.g., 

a 300 horsepower bulldozer is replaced by a bulldozer of similar horsepower). 

In addition, when emission reductions are calculated for replacements, note that: 

• The emission reductions are available only for the remaining useful life of the vehicle, engine, 

or equipment being replaced (e.g., if the vehicle being replaced had a remaining useful life of 

5 years, the additional emission reductions from the new vehicle are available for SIP or 

conformity purposes under this guidance only for 5 years).

• The emission reductions are available only for activity (e.g., travel or hours of use) of the 

vehicle, engine, or equipment being replaced within the nonattainment or maintenance area. 

Thus, if you replace an older, less used vehicle or piece of equipment with a piece of new 

equipment, it is likely that the new equipment would be used more than the item it replaces. 

However, emission reductions from the new equipment would need to be calculated based on 

the activity level of the old equipment. 

1.6 How does this guidance relate to the Voluntary Mobile Source Emission 

Reduction Program SIP guidance?

In October 1997, EPA issued its “Guidance on Incorporating Voluntary Mobile Source 

Emission Reduction Programs in State Implementation Plans (SIPs)” (the VMEP guidance).9 The 

 

9

This guidance is found at: http://www.epa.gov/otaq/stateresources/policy/general/vmep-gud.pdf EPA notes that the 

VMEP guidance is related to SIP measures, rather than transportation or general conformity determinations. Control 
12

purpose of the 1997 VMEP guidance is to support innovative methods in achieving emission 

reductions for SIPs. The VMEP guidance applies to SIP emission reduction measures that rely on 

voluntary actions of individuals and other parties. 

Many state or federally-funded retrofit projects may not be subject to the VMEP guidance if 

they have well-defined requirements to ensure the full implementation of a SIP program. For 

example, retrofit projects would not be subject to the VMEP guidance if a state or local regulation or 

ordinance that required retrofit projects was included in the SIP. Another example of a project that 

would not be subject to the VMEP guidance would be a state program that is described in the SIP 

that requires state transportation construction contracts to be implemented with retrofitted 

construction equipment. Please consult your EPA Region early in the development of a retrofit 

project to determine the appropriate use of the VMEP guidance. Retrofit projects that are preempted under applicable provisions of Clean Air Act section 209, as discussed in Section 1.7, may 

not be included in the SIP. 

 Under the VMEP guidance, the amount of emission reductions allowed for voluntary mobile 

measures in a SIP is presumed to be no greater than three percent of the total projected future year 

emission reductions required to attain the applicable air quality standards. EPA acknowledges that it 

may be possible to demonstrate that voluntary measures may achieve credible reductions higher than 

the three percent cap. In that case, EPA will re-evaluate that cap on a case-by-case basis and allow 

the cap to be exceeded if the cap hinders the implementation of effective voluntary control measures, 

subject to notice and comment during SIP approval. Today’s guidance relies on EPA’s 1997 VMEP 

guidance for voluntary retrofit projects. Interested parties should refer to that guidance at the time a 

specific retrofit project is under development. 

1.7 Can a state require retrofits of on-road and nonroad vehicles, engines, or 

equipment?

 The answer to this question depends on the circumstances for an individual state. Clean Air 

Act section 209 sets forth certain restrictions on the abilities of states and localities to adopt and 

implement emission standards for certain on-road and nonroad vehicles, engines, and equipment. 

The effect of Clean Air Act section 209 on a particular state’s retrofit requirements can vary 

depending on the specific provisions of those retrofit requirements. State and local agencies should 

check with EPA before promulgating any state or local regulations or programs mandating retrofit 

projects for SIP or conformity purposes. See Section 1.9 of this guidance for EPA contact 

information. 

 measures for conformity determinations must meet the relevant criteria in the transportation and general conformity 

regulations. 
13

1.8 Does this guidance create any new requirements? 

 This guidance does not create any new requirements, but explains to state and local air 

agencies, transportation agencies, MPOs, and the general public how the air quality benefits of 

commuter programs could be included in a SIP or in a transportation conformity determination. The 

Clean Air Act (CAA) and implementing regulations contain legally binding requirements. SIP 

requirements can be found in Clean Air Act sections 110(a)(2) and 172(c). Transportation and 

general conformity requirements can be found in Clean Air Act section 176(c) and applicable 

regulations (40 CFR Parts 51 and 93). This guidance document does not substitute for those 

provisions or regulations, nor is it a regulation itself. Thus, it does not impose binding, enforceable 

requirements on any party, and may not be applicable in all situations. EPA and State decision 

makers retain the discretion to adopt approaches for approval of SIP measures that differ from this 

guidance where appropriate and consistent with applicable law and regulations. Any final decisions 

by EPA regarding a particular SIP measure will only be made based on the statute and regulations in 

the context of EPA notice and comment rulemaking on a submitted SIP revision. This guidance may 

be revised periodically without public notice. 

1.9 Who should I contact for additional information?

 If this guidance document does not answer a specific question, please contact the appropriate 

EPA regional office with responsibility for air quality planning and/or conformity in the area where 

the retrofit project is located. A contact list of EPA Regions is available at the following web 

address: www.epa.gov/epahome/locate2.htm. In addition, contact information for EPA regional 

transportation conformity staff can be found at the following website: 

www.epa.gov/otaq/stateresources/transconf/contacts.htm. 

For general questions regarding retrofit projects or the application of verified retrofit 

technologies for the existing fleet of on-road and nonroad vehicles, engines, and equipment, please 

contact EPA’s National Clean Diesel Campaign at cleandiesel@epa.gov. 

 For technical questions regarding the use of MOVES or NMIM/NONROAD for calculating 

emission reductions from retrofit projects, please contact EPA’s Office of Transportation and Air 

Quality at mobile@epa.gov. 

 For general questions concerning the use of emission reductions from retrofit projects in SIPs 

or in transportation conformity, please contact Astrid Larsen of EPA’s Office of Transportation and 

Air Quality at (734) 214-4812, larsen.astrid@epa.gov or Gary Dolce also at EPA’s Office of 

Transportation and Air Quality at (734) 214-4414, dolce.gary@epa.gov. 

For general questions concerning the use of emission reductions from retrofit projects in 

general conformity, please contact Tom Coda of EPA’s Office of Air Quality Planning and 

Standards at (919) 541-3037, coda.tom@epa.gov. 
14

SECTION 2: QUANTIFYING RETROFIT EMISSION 

REDUCTIONS 

2.1 How do you quantify emission reductions from retrofit projects?

 To estimate emission reductions from retrofit projects for SIPs and for conformity analyses 

in states other than California, EPA recommends the use of the following models: 

• The MOtor Vehicle Emissions Simulator (MOVES) for on-road vehicles10 and

• The National Mobile Inventory Model (NMIM) containing NONROAD2008 for nonroad 

sources contained in the model.11 

 The most recent approved versions of these models should be used. Users should check 

EPA’s MOVES and NMIM websites for the most current approved version of these models 

(MOVES2010b and NMIM2008 as of the release date of this guidance document). EPA intends to 

integrate nonroad capabilities into a future version of MOVES. 

 EPA is not providing a methodology at this time for the quantification of emission

 reductions from retrofit projects in California. State and local agencies developing SIPs and 

conformity analyses for California should consult with EPA Region 9 for information on the current 

version of EMFAC approved for use in California and for information on how to quantify emission 

reductions from retrofit projects.

2.2 What are MOVES and NMIM and why should they be used to quantify 

emission reductions from retrofits?

MOVES is EPA’s latest motor vehicle emissions model for state and local agencies to 

estimate volatile organic compounds (VOCs), nitrogen oxides (NOx), particulate matter (PM), 

carbon monoxide (CO), and other precursors from cars, trucks, buses, and motorcycles for SIP 

purposes and conformity determinations outside of California. MOVES is available at 

http://www.epa.gov/otaq/models/moves/index.htm.

12 MOVES replaced MOBILE6.2, EPA’s 

previous emissions model. MOVES is required for SIPs begun after December 2009 and regional 

transportation conformity analyses begun after March 2, 2013. See EPA’s “Policy Guidance on the 

 

10 This guidance is applicable to current and future versions of the MOVES model, unless EPA notes otherwise when 

approving the model for conformity purposes. Modelers should follow the “Using MOVES to Prepare Emission 

Inventories in State Implementation Plans and Transportation Conformity: Technical Guidance for MOVES2010, 2010a, 

and 2010b,” EPA-420-B-12-028 (April 2012); available online at www.epa.gov/otaq/models/moves/index.htm#sip. The 

MOVES model, user guide, and supporting documentation are available online at

www.epa.gov/otaq/models/moves/index.htm. 11 NMIM2008 and supporting documentation are available online at www.epa.gov/otaq/nmim.htm. NONROAD2008 

could also be used, but EPA does not recommend this because NONROAD2008 does not include the fleet specific 

capabilities included in NMIM. NONROAD2008 also may not work with newer 64-bit operating systems. 12 Note that this guidance refers to “MOVES” generally rather than a particular MOVES version because EPA will 

release updated versions of MOVES in the future. 
15

Use of MOVES2010 and Subsequent Minor Revisions for State Implementation Plan Development, 

Transportation Conformity, and Other Purposes” (available at 

www.epa.gov/otaq/models/moves/documents/420b12010.pdf) for more details. MOVES includes 

features that are specifically intended for modeling retrofit programs which are described in detail in 

Sections 2.5 and 2.6 below. 

 NMIM is a graphical user interface (GUI) that contains the NONROAD2008 and (the now 

no longer used) MOBILE6.2 models and a database of county-level input information, called the 

National County Database (NCD). NMIM was created to simplify the process of developing 

county-by-county emissions inventories for multi-county areas, states, or the entire nation. MOVES 

has replaced NMIM for on-road emissions estimation and, as a result, the use of on-road emissions 

estimates from NMIM is not currently acceptable for any regulatory purpose. However, the portion 

of NMIM that contains NONROAD2008 is the best option for modeling retrofit, rebuild, and 

replacement programs that affect nonroad equipment. The use of NMIM to model retrofit programs 

for nonroad equipment is described in detail in Sections 2.7 and 2.8 below. NMIM is available at 

www.epa.gov/otaq/nmim.htm. 

 MOVES and NMIM incorporate EPA’s latest emissions data for on-road and nonroad 

sources respectively, as well as the capabilities to apply retrofit benefits to emission factors or 

inventories that are generated by MOVES and NONROAD under local conditions. The emissions of 

retrofit highway and nonroad vehicles, engines, and equipment are subject to the same external 

factors as are the emissions for all other vehicles, engines, and equipment. These external factors 

include environmental factors (e.g., temperature, humidity), fleet characteristics (e.g., age 

distribution of fleet, distribution of VMT by vehicle class, number and types of nonroad engines or 

equipment), activity measures (e.g., speed distributions, distribution of VMT by roadway type, 

distribution of hours of operation for nonroad equipment), and fuel characteristics (e.g., sulfur 

content, Reid vapor pressure (RVP)). The majority of impacts of these external factors on the 

emissions of vehicles, engines, and equipment meeting past, current, and future emission standards 

are incorporated in EPA’s MOVES and NONROAD emissions models which are used to develop 

emissions inventories for SIPs and for regional transportation conformity analyses. Using MOVES 

and NMIM to generate retrofit emission reductions ensures that those reductions are based on the 

same conditions used to generate the rest of the inventory used in the SIP or conformity analysis. 

2.3 How should the data included in MOVES and NMIM be used when 

quantifying emission reductions from retrofits? 

 As with any model, the quality of the inputs in MOVES and NMIM affects the quality of the 

model results. As required by Clean Air Act Section 172(c)(3) and EPA’s regulations at 40 CFR 

51.112(a), States must use the latest planning assumptions available at the time the SIP is developed, 

including, but not limited to VMT, speeds, fleet mix and SIP control measures. 

 MOVES includes a national default database of fleet and activity information that is applied 

at the county level. However, in most cases, local data should be used instead of default fleet and 

activity data. Detailed guidance on the development of MOVES inputs for SIP and conformity 
16

analyses is included in “Using MOVES to Prepare Emission Inventories in State Implementation 

Plans and Transportation Conformity: Technical Guidance for MOVES2010, 2010a, and 2010b” 

(hereafter referred to as the MOVES Technical Guidance) available on the MOVES web page at 

http://www.epa.gov/otaq/models/moves/index.htm#sip. All inputs used in estimating retrofit 

benefits for SIP or conformity purposes should be consistent with the MOVES Technical Guidance. 

This retrofit guidance document addresses the specific inputs needed for on-road retrofit programs 

which are not covered in the MOVES Technical Guidance. 

 As stated above, NMIM should be used only for modeling retrofit, rebuild, and replacement 

programs that affect nonroad equipment. NMIM includes a database of county-level nonroad 

information called the National County Database (NCD). States have provided some local 

information for the National County Database (NCD) as part of the National Emissions Inventory 

(NEI) development process. However, given the NEI cycle, this may not be the most recent or best 

available information at the time a state initiates modeling. For SIPs and regional conformity 

analyses, state and local agencies should review the information in the NCD to evaluate whether it 

includes the latest and best information currently available. Where more current or better 

information is available, the database must be modified to incorporate it to meet regulatory 

requirements for the use of latest planning assumptions in SIPs and conformity determinations.13 

The interagency consultation process should be used to evaluate what changes are needed in the 

NMIM database for the area.

2.4 Can you use MOVES or NMIM to estimate emission reductions from retrofit 

projects for uses other than SIPs or conformity determinations?

Yes. MOVES could be used to evaluate on-road retrofit projects and NMIM could be used 

to evaluate nonroad retrofit projects for other purposes, such as the development of proposals for 

retrofit projects. For these purposes, MOVES and NMIM users could rely more on default data in 

MOVES and NMIM or other more simplified methods for using MOVES and NMIM than would 

otherwise be necessary for SIP or conformity purposes. These simplified methods may result in 

emission reduction estimates that are not completely consistent with emission reductions calculated 

for SIP or conformity purposes using more rigorous methods. Consultation between organizations 

developing project proposals and state and local air quality and transportation agencies about 

appropriate methods and interpretation of results is important to ensure that retrofit projects are 

properly evaluated.

2.5 How do you use MOVES2010b to quantify emission reductions from retrofit 

projects?

Retrofit projects are modeled using the On-Road Retrofit option in the Control Strategies 

panel to create an on-road retrofit input file in MOVES. The details of how to do this in 

MOVES2010b are described in Section 2.2.9 and Appendix D of the MOVES2010b User Guide 

 

13 EPA encourages states to separately submit updates to the NCD so that the most accurate database is available for both 

national and local inventory development.
17

(available at http://www.epa.gov/otaq/models/moves/documents/420b12001b.pdf.) This part of this 

guidance document summarizes some of the key inputs for MOVES and discusses some of the 

issues that users face when developing input data. Note that, unlike all other MOVES input files, the 

retrofit parameter file uses abbreviated names rather than ID numbers for most of the input 

parameters.

 EPA has supplied a Retrofit Converter tool for simplifying the creation of an on-road retrofit 

input file, which is available at www.epa.gov/otaq/models/moves/tools.htm under the heading 

“Retrofit Converter”. The Retrofit Converter allows the user to describe the retrofit project in terms 

of the verified technology and vehicles to which it applies (type, number, model year), and creates 

the appropriate input file for MOVES. The tool automatically accounts for chained pollutants (i.e., 

emissions for pollutants that are dependent in MOVES on the emissions of another pollutant), 

creates input lines for each pollutant process, and uses the appropriate abbreviated name, among 

other things. For SIP and conformity purposes, the Retrofit Converter tool should be used in a 

manner consistent with the guidance in this document and the MOVES Technical Guidance. The 

instructions that come with the tool do not provide all of the detail included in this guidance and are 

not a substitute for it. The Retrofit Converter does have some limitations which are described in 

Sections 2.5.2 and 2.5.7. Users of the Retrofit Converter should always check the output of the 

converter to make sure it is consistent with the rest of this guidance. 

The MOVES retrofit input file describes the details of the retrofit project. This includes 

inputs that specify the pollutants and pollutant processes affected by the retrofit project, the fuel 

types affected, the vehicle types affected, the calendar years during which the retrofits occur, the 

model years of the vehicles that will be retrofitted, the percentage of the fleet VMT accounted for by 

retrofit vehicles per year, and the percentage effectiveness of the retrofit technology applied to the 

vehicles. Details on the use of these inputs are described in the Appendix D of the MOVES User 

Guide. Specific guidance on these inputs, where applicable, is given below. 

2.5.1 Pollutant 

 EPA and CARB have verified emission reductions from retrofit technologies only for NOx, 

VOC, CO, PM10, and PM2.5 emissions. Therefore, when estimating emission reductions from retrofit 

projects for a SIP or conformity purposes, only these pollutants and any pollutants that are needed by 

MOVES to calculate emissions of these pollutants should be selected (see Section 2.2.7.2 of the 

MOVES User Guide for a list of base and dependent pollutants or use the Retrofit Converter tool to 

automatically include any other pollutants are needed to calculate the emission of the pollutant you 

are estimating). As discussed in Section 2.5.7 below, a retrofit evaluation for SIP or conformity 

purposes should include all pollutants for which the project area is nonattainment or maintenance, 

including any that increase as a result of the retrofit technology.

2.5.2 Pollutant Process

The retrofit parameter file will include a separate line for each pollutant process affected by 

the retrofit technology. All retrofit parameter files must include start and running exhaust processes 
18

for each pollutant for which you are estimating reductions. Some retrofit technologies may also 

reduce crankcase running and crankcase start emissions and will include lines for each of these

processes. There are no reductions associated with the extended idle process for retrofit 

technologies included in the EPA and CARB verified technology lists. The Retrofit Converter tool 

automatically creates the inputs for start and running exhaust processes, but not for crankcase start 

and running exhaust processes, which must be entered separately. Section 2.5.7 of this document 

provides additional guidance on selecting pollutant process inputs for technologies that reduce 

crankcase emissions.

2.5.3 Fuel Type and Source Type

 As discussed in Section 1.3, this guidance document addresses on-road retrofit projects only 

for heavy-duty diesel vehicles. The retrofit input in MOVES allows you to enter the full range of 

on-road source types (vehicle types) and fuel types, but only inputs for heavy-duty diesel vehicles 

should be used for retrofit emission reductions in SIPs or conformity determinations. The Retrofit 

Converter will convert fuel and source type names to the appropriate abbreviated names. 

2.5.4 Initial Calendar Year and Final Calendar Year of Retrofit Implementation 

 The Initial Calendar Year and the Final Calendar Year of Retrofit Implementation should be 

equal to the calendar year you are modeling. For example, if the calendar year of your analysis is 

2012, the initial and final years of implementation should also be 2012. Using other years may 

cause an incorrect result.

2.5.5 Initial Model and Final Model Year Retrofitted 

 This input allows you to define the vehicle model years covered by the retrofit project. Note 

that the Retrofit Converter only has a single input line labeled “Vehicle Model Year”. For projects 

that cover multiple model years, simply create a new line in the converter for each year. Using this 

approach will ensure that differences in fractions of the fleet retrofit by model year are accounted for 

in the retrofit calculation.

2.5.6 Fraction of Fleet Retrofit 

 This input represents the fraction of activity (VMT for running emissions and vehicle 

population for start emissions) associated with retrofitted vehicles for a particular model year and 

source type. This number can be a value from 0.00 through 1.00. For example, if retrofitted 2010 

model year school buses account for 40% of all 2010 model year school bus VMT in the calendar 

year of analysis, you would enter 0.40 for the fraction of the school bus fleet retrofitted for the 2010 

model year.
19

2.5.7 Effectiveness of the Retrofit 

 This input is used to describe the effectiveness of the particular vehicle, engine, or equipment 

technologies being used in the retrofit project. As mentioned in Section 1.4, EPA has verified the 

emission reductions for certain retrofit technologies. A list of these EPA-verified retrofit 

technologies, the vehicle types and model years they apply to, and the emission reductions 

associated with them can be found at http://www.epa.gov/cleandiesel/verification/verif-list.htm. 

Retrofit technologies that have been verified by the California Air Resources Board (CARB) can be 

found at: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm. You should use retrofit reductions from 

these verified retrofit technology lists as inputs for MOVES. These reductions are entered in 

MOVES as a fraction less than or equal to 1.00 (e.g., a 50% reduction is entered as 0.50). The same 

value should be added for both running and start emissions processes. 

Retrofit technologies that include closed crankcase systems will require some adjustments to 

the values included given in the verified technology list to account for the way MOVES separates 

crankcase start and running emissions as separate processes from tailpipe start and running 

emissions. For closed crankcase technologies, add additional lines to the input file for crankcase 

start emissions and crankcase running emissions with an effectiveness fraction of 1.00 (i.e., 100% 

reduction in crankcase emissions) for PM emissions (do not add lines for crankcase emissions for 

any other pollutants). In addition, the values for tailpipe start and running emissions benefits for PM 

should be adjusted downward by 5%. For example, if the retrofit technology includes a closed 

crankcase system and the verified technology list gives a PM reduction of 30%, you should have 

four lines in the input file for PM: 

1. Crankcase start with an effectiveness value of 1.00

2. Crankcase running with an effectiveness value of 1.00 

3. Start exhaust with an effectiveness value of 0.25 

4. Running exhaust with an effectiveness value of 0.25 

 The Retrofit Converter includes information from EPA’s verified technology list in Column J 

of the User Input tab under the heading “Default Removal Efficiency” based on the technology 

selected in Column A, “Verified Technology.” However, this information may change and the 

Converter may not be up-to-date. You should always look up the benefit in the verified technology 

list and enter that number in Column C, “User Specified Removal Efficiency.” If you are relying on 

a technology from CARB’s verified technology list, you will have to look up those reductions on the 

CARB website and enter them in Column C. 

 Note that the Converter only enters lines for the start exhaust and running exhaust processes. 

You will have to manually enter lines for PM for crankcase start and running emissions for 

technologies that include closed crankcase systems. The Retrofit Converter also does not 

automatically adjust the start and running exhaust emissions downward as described above. The 

user specified removal efficiency will have to be adjusted to reflect the decreased benefits for start 

and running exhaust. 

 Note that the emission reductions for each verified technology in the EPA and CARB 

verified technology lists are specific to certain categories of vehicles or engines and to certain model 

years. The emission reductions in those lists should be applied only to the categories of vehicle or 
20

engines and model years for which they have been specifically verified. Also note that the Retrofit 

Converter does not check that the vehicle types and model years given in the verified technology list 

for a particular retrofit technology are consistent with the vehicle types and model years entered by 

the user in the Converter. It is your responsibility to check and edit the input file created by the 

Retrofit Converter as needed to ensure it is consistent with the information in the verified technology 

list and this guidance. 

 Some verified retrofit technologies may result in emission reductions for one pollutant and 

emissions increases for another. Any analysis of retrofit projects for SIPs or conformity purposes 

should include all pollutants for which the project area is nonattainment or maintenance that are 

affected by the retrofit project, including any that increase as a result of the retrofit technology used. 

An emissions increase from a retrofit is entered in MOVES as a negative number (e.g., a retrofit that 

results in a 50% increase in emissions would be entered as -0.50). 

 For most types of retrofit projects with the exception of replacements (discussed in Section 

2.6), the emission reductions for the project are best determined by using two MOVES runs - one 

with the percentage effectiveness of the retrofit set to zero (to represent the inventory without the 

project) and one with it set to the appropriate level for the technology used (to represent the 

inventory with the project). All other parameters in this section would be set identically to describe 

the affected fleet of vehicles or equipment. The difference in emissions between these two runs is 

the emission reduction associated with the retrofit project.

2.6 How do you use MOVES to quantify emission reductions from vehicle or 

engine replacements?

 Emission reductions from vehicle or engine replacements should not be modeled using the 

On-Road Retrofit Strategy (or the retrofit input file) in MOVES. Instead, you will need to do two 

runs, using the “Fueltype and Technologies” importer in the County Data Manager to define a base 

case fleet and a control case fleet consisting of different model years. Use of the Fueltype and 

Technologies importer is discussed in the MOVES User Guide and in Section 4.9 of the MOVES 

Technical Guidance.

 In this case, we strongly recommend that you set up the base case and control case MOVES 

runs to include only the fleet of vehicles affected in the project. For example, if you are evaluating a 

retrofit project in 2012 that involved replacing 2005 model year school buses with 2010 model year 

buses, emission reductions should be calculated in the following way: 

1. Set up a base case RunSpec for 2012, selecting only diesel school buses in the 

Vehicles/Equipment panel.

2. Create the base case input files for the CDM that describe the expected activity of 2005 

model year school bus in the analysis year, 2012. 

3. Create an age distribution input file for the CDM which only includes 2005 model year 

school buses. 

4. Create a Fueltype and Technologies input file in which all the school buses are 2005 model 

year diesel buses.
21

5. Run MOVES to get the emissions of 2005 model year school buses in 2012. 

6. Set up a control case RunSpec identical to the base case RunSpec.

7. Use the same input files as in step 2; i.e., assume that the control case buses have the same 

activity as the base case buses.

8. Create a Fueltype and Technologies input file in which all the school buses are 2010 model 

year diesel buses.

9. Run MOVES to get the emissions of 2010 model year school buses in 2012. 

10. Take the difference between the base case and control case runs to get the benefits of the 

replacement project.

 Note that these reductions should not be used beyond the useful life of the vehicles, engines, 

or equipment being replaced. In this example, if the useful life of these school buses is 10 years, 

emission reductions could be applied under this guidance for calendar years 2010 through 2015. 

However, after 2015, these reductions would be considered part of the normal fleet turnover for 

these vehicles and would not be available for use in a SIP or in a conformity determination. See 

Section 1.5 for further information. 

2.7 How do you use NMIM to quantify emission reductions from nonroad retrofit 

projects?

The details of how to use NMIM to estimate the emissions impact of nonroad retrofit projects 

are described in the NMIM User Guide (available at www.epa.gov/otaq/nmim.htm). This part of 

this guidance document summarizes some of the key inputs for NMIM and discusses some of the 

issues that users face when developing input data. 

2.7.1 Differences between “fleet specific” and “fleet wide” retrofit projects 

NMIM divides retrofit projects into two different categories: "fleet specific" and "fleet wide." 

A "fleet specific" retrofit project refers to those projects where a well-defined group of nonroad 

vehicles or engines are the targets for retrofit. A construction company implementing a retrofit 

project would be an example of a fleet specific project. A fleet specific project could include 

multiple model years, or multiple equipment types. The key defining characteristic of a fleet 

specific project is that the actual number of nonroad vehicles or engines, as well as their type, model 

year, and activity is known. 

A "fleet wide" retrofit project refers to situations where the actual nonroad vehicles or 

engines that will be affected by the retrofit project are not known in advance. One example of a fleet 

wide retrofit project would be the availability of a low emission diesel fuel that applies to the entire 

nonattainment area rather than to specific fleets in the nonattainment area. In this case, the actual 

number of nonroad vehicles or engines, or their type, model year, or activity is not precisely known. 

There are important differences between fleet specific and fleet wide projects that affect the 

kind of information that is needed to run NMIM. It is assumed that for fleet specific projects the 

precise number of nonroad vehicles or engines in each model year of each class that are to be retrofit 
22

will be known. In addition, it is assumed that the annual average hours accumulated by each model 

year of each class is also known. In general, retrofit projects that involve the addition of specific 

equipment to nonroad engines or vehicles, or involve the replacement of nonroad engines, vehicles 

or equipment, should be modeled as fleet specific projects because the entities involved with this 

type of project should be able to keep the records of the nonroad vehicles or engines modified or 

replaced and their average use.

 In contrast, fleet wide projects are expected to have no precise information about the 

individual nonroad vehicles or engines that will be retrofitted. In this case, the NMIM model 

assumes that the average hours accumulated by retrofit vehicles or engines is the same as for all 

nonroad vehicles or engines of that model year and vehicle or engine class. Implementation is 

expressed as a fraction of all nonroad vehicles or engines of that model year and vehicle class. In 

general, retrofit projects based on fuels available to the general fleet will likely need to be modeled 

using the fleet wide approach. 

 As discussed in detail in the NMIM User Guide, the specifics of nonroad retrofit projects are 

described in an input file called the “Nonroad Retrofit Parameters File.” This file is used for both 

fleet specific and fleet wide retrofit projects. For nonroad fleet specific projects, an additional input 

file called the “Nonroad Fleet Information Parameters File” is required. This file describes in detail 

the specific fleet affected by the retrofit project.

2.7.2 The retrofit parameters 

The file for nonroad retrofit parameters describes the details of the retrofit project. This 

includes inputs that specify the pollutants affected by the retrofit project, the nonroad vehicle or 

engine types affected, the calendar years during which the retrofits occur, the model years of the 

vehicles or engines that will be retrofitted, the percentage of the fleet retrofit per year, and the 

percentage effectiveness of the retrofit technology applied to the vehicles or engines. Details on the 

use of these inputs are described in the NMIM User Guide. Specific guidance on these inputs, where 

applicable, is given below. 

2.7.2.1 Pollutants affected by the retrofit project

 While NMIM allows you to enter the entire range of pollutants for which NONROAD2008 

provides emissions estimates, EPA and CARB have verified emission reductions from retrofit 

technologies only for NOx, VOC, CO, PM10, and PM2.5 emissions. Therefore, when estimating 

emission reductions from nonroad retrofit projects for a SIP or conformity determination, only these 

pollutants should be evaluated. As discussed in Section 2.6.2.3 below, all pollutants for which the 

project area is nonattainment or maintenance that are affected by the retrofit project, including any 

that increase as a result of the retrofit technology, should be evaluated for SIP or conformity 

purposes. 
23

2.7.2.2 Nonroad vehicle or engine types affected

 As discussed in Section 1.3 above, this guidance document addresses nonroad retrofit 

projects only for diesel nonroad vehicles, engines, and equipment. NMIM allows you to enter the 

full range of vehicle and engine types included NONROAD2008, but only inputs for nonroad diesel 

vehicles or engines should be used for retrofit emission reductions in SIPs or conformity 

determinations.

2.7.2.3 Percentage effectiveness of the retrofit

This input is used to describe the effectiveness of the particular vehicle, engine, or equipment 

retrofit technologies being used in the retrofit project. As mentioned in Section 1.4, EPA has 

verified the emission reductions for certain retrofit technologies. A list of these EPA-verified retrofit 

technologies and the emission reductions associated with them can be found at 

www.epa.gov/cleandiesel/verification/verif-list.htm. A link to retrofit technologies that have been 

verified by CARB can be found at http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm. Retrofit 

reductions from these verified retrofit technology lists should be used as inputs for NMIM. 

 Note that the emission reductions for each verified technology in the EPA and CARB 

verified technology lists are specific to certain categories of vehicles or engines. The emission 

reductions in those lists should be applied only to the categories of vehicle or engines for which they 

have been specifically verified. 

 Some verified retrofit technologies may result in emission reductions for one pollutant and 

emissions increases for another. Any analysis of retrofit projects for SIPs or conformity purposes 

should include all pollutants for which the project area is nonattainment or maintenance that are 

affected by the retrofit project, including any that increase as a result of the retrofit technology used.

For most types of retrofit projects with the exception of replacements (discussed in Section 

2.8), the emission reductions for the project are best determined by using two NMIM runs - one with 

the percentage effectiveness of the retrofit set to zero (to represent the inventory without the project) 

and one with it set to that appropriate level for the technology used (to represent the inventory with 

the project). All other parameters in this section would be set identically to describe the affected 

fleet of vehicles or equipment. The difference in emissions between these two runs is the emission 

reduction associated with the retrofit project. 

2.7.3 The fleet information parameters 

 The file for nonroad fleet information is used to provide details of specific fleets of vehicles 

or engines for which more detailed information is known. Use this file, along with the retrofit 

parameter file described above, when quantifying the emission reductions from fleet specific retrofit 

projects. For nonroad equipment, this file includes three inputs needed to specify the engines in the 

project – source category classification (SCC) code, horsepower bin, and technology type – as well 

as model year, number of engines, activity in hours per year, and monthly activity allocation. 
24

 Details on the use of these inputs are described in the NMIM User Guide. Specific guidance 

on these inputs, where applicable, is given below. If you are modeling a fleet specific project, you 

should be able to enter detailed information for all of these inputs. Note that these files only 

describe characteristics of a fleet of vehicles or engines; they do not describe any details of a retrofit 

project. When quantifying the reductions for a fleet specific retrofit project, the fleet information 

parameters files are used to describe the specific fleet, while the retrofit parameter files are used to 

describe the retrofit project applied to that fleet. When used without retrofit parameter files, the fleet 

information files can be used to simply quantify the emissions for any specific fleet of vehicles or 

engines. 

2.7.3.1 Vehicle class or specific engine parameters

 Because this function can be used to quantify the emissions from any specific fleet of 

vehicles or engines, there is no restriction on the types of vehicles or engines that can be entered 

here. However, retrofit emission reductions will be applied only to those vehicles or engines 

specified in the retrofit parameters file, which, as described above, should include only diesel 

vehicles and engines.

2.7.3.2 Number of vehicles or engines

 The number of vehicles or engines entered for the specific fleet should be based on the 

calendar year for which emission estimates are being calculated. When estimating emissions for a 

specific fleet in the current year, this is the current size of the fleet. However, in future years the 

fleet of affected vehicles or engines may become smaller as some vehicles or engines in the fleet are 

scrapped while other newer, non-retrofit vehicles may be added to the fleet. NMIM includes the 

effects of normal attrition when projecting future emissions for the entire fleet (e.g., the model 

assumes that the number of 1998 model year vehicles or engines decreases in each future year). 

However, these effects are not applied to the number of vehicles or engines entered in the fleet 

information file for a specific fleet (e.g., if your input file indicates that you have twenty 1998 model 

year vehicles or engines in your retrofit fleet in 2005, NMIM will assume twenty 1998 model year 

vehicles or engines in any future year that you model). If you have reason to believe that some of 

the vehicles currently in the specific fleet may no longer be in the fleet by the calendar year that is 

being evaluated, reduce the input for number of vehicles or engines appropriately.

2.7.3.3 Hours of use 

 The activity level (hours of use) entered for the specific fleet should be based on the activity 

that actually occurs within the nonattainment or maintenance area that the SIP or conformity analysis 

applies to. For example, in the case of a retrofit project applied to a fleet of construction equipment, 

you must not include hours of use when that equipment is taken outside the nonattainment or 

maintenance area.
25

 The activity level (hours of use) entered for the specific fleet should be based on the calendar 

year for which emission estimates are being calculated. When estimating emissions for a specific 

fleet in a current year, this is the current activity level of the fleet. However, in future years, the 

activity level of the affected vehicles or engines in the fleet may change as older vehicles and 

engines are often used less than newer ones. NMIM includes the effects of decreased activity with 

age when projecting future emissions for the entire fleet (e.g., NMIM assumes that the activity of 

1998 model year vehicles or engines decreases in each future year). However, these effects are not 

applied to the activity levels entered in the fleet information file for a specific fleet (e.g., if your 

input file indicates that 1998 model year tractors are used 1000 hours in 2005, NMIM will assume 

that 1998 model year tractors are used 1000 hours in any future year that you model). If you have 

reason to believe that activity levels of vehicles or engines currently in the specific fleet may be 

lower by the calendar year that is being evaluated, this lowered activity should be accounted for by 

reducing the input for hours of use appropriately. 

 Specific information on the hours of use of retrofit vehicles or engines may be available from 

maintenance records, user logs, or fuel records. In the absence of this kind of information, the 

interagency consultation process should be used to determine the best available information to 

account for activity in the calculation of emission reductions from a retrofit project. In the absence 

of better information, agencies could agree to use local average estimates of vehicle or equipment 

activity for the class and model year of vehicles or engines included in the retrofit project.

2.8 How do you use NMIM to quantify emission reductions from vehicle, engine, 

or equipment replacements?

 In general, emission reductions from vehicle, engine, or equipment replacements should be 

modeled using the fleet specific approach described in Section 2.7, with some modifications. 

Vehicle, engine, or equipment replacement projects will need to run NMIM twice. NMIM should be 

run once as a base case without the replacement data and then again with the control case that 

accounts for the new replacement information. For a retrofit project that uses replacements, the 

percentage effectiveness of the retrofit should be set to zero in both the base case (without the 

retrofit project) and the control case (with the retrofit project). Instead, the model year of the 

vehicles or engines affected are varied in the fleet information parameters. For example, if the 

retrofit project involved replacing 2005 model year excavators with 2010 model year excavators, 

emission reductions would be calculated as the difference between the following two NMIM runs: 

• Base case – Engine model year14 set to 2005; all other parameters, including activity, set to 

describe how the model year 2005 excavators are expected to be used in the analysis year; 

retrofit effectiveness set to zero.

• Control case – Engine model year set to 2010; all other parameters, including activity, set to 

the same values as in the base case; retrofit effectiveness set to zero.

 14 Engine model year and chassis model year can in some cases be different. 
26

Note that these reductions should not be used beyond the useful life of the vehicles, engines, or 

equipment being replaced. In this example, if the useful life of these excavators is 10 years, 

emission reductions could be applied under this guidance for calendar years 2010 through 2015. 

However, after 2015, these reductions would be considered part of the normal fleet turnover for 

these vehicles and would not be available for use in a SIP or in a conformity determination. See 

Section 1.5 for further information. 
27

SECTION 3: USING EMISSION REDUCTIONS IN SIPS

3.1 What are the basic requirements for using emission reductions in SIPs?

 In order to be approved as a control measure which provides additional emission reductions 

in a SIP, a retrofit project would need to be consistent with SIP RFP, attainment, or maintenance 

requirements and other requirements of the Clean Air Act, as appropriate. The retrofit project must 

provide emission reductions that meet the basic SIP requirements described below. Information is 

separated into “SIP Requirement” and “Specific Recommendations”. The “SIP Requirement” 

heading refers to mandatory requirements under Clean Air Act section 110. The “Specific 

Recommendations” headings include our recommendations for implementing a retrofit project. 

While these recommendations are not binding, they may provide appropriate safeguards and 

considerations for a successful retrofit project. 

3.1.1 Quantifiable - 

SIP Requirement: The emission reductions from a retrofit project are quantifiable if they 

are measured in a reliable manner and can be replicated (e.g., the assumptions, methods, and results 

used to quantify emission reductions can be understood). Emission reductions must be calculated 

for the time period during which the reductions will occur and will be used for SIP purposes. 

Specific Recommendations: 

• In general, if you are retrofitting certified vehicles, engines, or equipment with EPA or CARB 

verified emission control technologies or certified engine configurations, quantifying the 

emission reductions is fairly straightforward. In these circumstances, you will need to 

document the emission reductions and provide all relevant data to EPA for review. 

Section 2 of this document provides you with a recommended method for quantifying 

emission reductions. 

3.1.2 Surplus - 

SIP Requirement: Emission reductions are considered “surplus” if they are not otherwise 

relied on to meet other applicable air quality attainment or maintenance requirements for that 

particular NAAQS pollutant (i.e., there can be no double-counting of emission reductions). In the 

event that the retrofit project is used to meet such air quality related program requirements, they are 

no longer surplus and may not be used as additional emission reductions. Emissions from the 

vehicles, engines, or equipment to be retrofitted must be in the applicable mobile source emissions 

inventory before the emission reductions from a retrofit project can be used for RFP, attainment or 

maintenance in a SIP.
28

3.1.3 Federally Enforceable - 

SIP Requirement: A SIP retrofit project must be enforceable. Depending on how the 

emission reductions are to be used, control measures must be enforceable through a SIP. Where the 

emission reductions are part of a rule or regulation for SIP purposes, they are considered federally 

enforceable only if they meet all of the following criteria:

• They are independently verifiable.

• Violations are defined, as appropriate. 

• You and EPA have the ability to enforce the measure if violations occur. 

• Those liable for violations can be identified. 

• Citizens have access to all the emissions-related information obtained from the responsible 

party.

• Citizens can file lawsuits against the responsible party for violations. 

• Violations are practicably enforceable in accordance with EPA guidance on practicable 

enforceability.

• A complete schedule to implement and enforce the measure has been adopted by the 

implementing agency or agencies.

 The specific requirements for enforceability vary when submitting a SIP retrofit project as a 

mandatory15 or voluntary measure. If your retrofit project is mandatory, then there is no cap on the 

amount of emission reductions that can be claimed as long as such reductions are supported and 

meet standard SIP enforceability requirements for mandatory measures and the baseline emissions 

are in the inventory. 

 If a retrofit control measure is approved under EPA’s VMEP guidance, the state is 

responsible for assuring that the reductions quantified in the SIP occur. The state would need to 

make an enforceable SIP commitment to monitor, assess, and report on the emission reductions 

resulting from the voluntary measure and to remedy any shortfalls from forecasted emission 

reductions in a timely manner. Under the VMEP guidance, the amount of emission reductions 

allowed for voluntary mobile source measures, including commuter programs, in a SIP is not 

expected to exceed three percent of the total reductions needed to meet any requirements for 

reasonable further progress, attainment or maintenance, as applicable.16 EPA acknowledges that 

some areas may be able to demonstrate that voluntary measures may achieve credible reductions 

higher than the three percent cap provided by the VMEP guidance. In that case, EPA will reevaluate that cap on a case-by-case basis and allow the cap to be exceeded if the cap hinders the 

implementation of effective voluntary control measures, subject to notice and comment during SIP 

approval. If you wish to have a retrofit project approved as a voluntary measure, consult the 1997 

 

15 As stated in Section 1.7 of this guidance, state and local agencies should check with EPA before promulgating any 

state or local regulations or programs mandating retrofit projects, due to potential issues related to Clean Air Act section 

209 requirements. 16 EPA acknowledges that it may be possible to demonstrate that voluntary measures may achieve credible reductions 

higher than the three percent cap. In that case, EPA will re-evaluate that cap on a case-by-case basis and allow the cap to 

be exceeded if the cap hinders the implementation of effective voluntary control measures, subject to notice and 

comment during SIP approval. Interested parties should refer to the VMEP guidance for more information when a 

specific commuter program is under development. 
29

VMEP guidance for further information. 

3.1.4 Permanent - 

SIP Requirement: The emission reduction produced by the retrofit project must be 

permanent throughout the time period that the reduction is used in the applicable SIP. The time 

period that the emission reductions from retrofit projects are used in the SIP can be no longer than 

the remaining useful life of the retrofitted or replaced engine, vehicle, or equipment. 

Specific Recommendations: 

• Emission reductions can be used from retrofitted vehicles, engines, and equipment that 

operate exclusively within the nonattainment or maintenance area. Vehicles, engines, and 

equipment that typically operate within a captive area may include, but are not limited to, the 

following: 

o School buses 

o Transit buses 

o Waste haulers

o State/local government owned vehicles and engines (e.g., department of 

transportation) 

o Nonroad construction and agricultural vehicles, engines, or equipment 

Some fleets may travel or some equipment may be used only partially in the nonattainment 

or maintenance area. Such fleets may be considered as part of a retrofit project for these 

purposes, but the emission reductions claimed are limited to the activity (and the associated 

emission reductions) that are expected to occur from such fleets within the nonattainment or 

maintenance area.

For regulatory or voluntary retrofit projects, you should demonstrate that the retrofitted 

vehicles, engines, or equipment remain in use within the nonattainment or maintenance area 

or their remaining useful life, to the extent emission reductions are claimed.

 

• EPA and CARB provide information on the durability of the verified retrofit technology 

which allows you to determine the length of time the technology may perform at its verified 

emission reduction capability. Consequently, you should select retrofit technologies that are 

verified or certified by EPA, or CARB respectively. For a list of verified technologies, see 

http://www.epa.gov/cleandiesel/verification/verif-list.htm 

3.1.5 Adequately Supported - 

SIP Requirement: The state must demonstrate that it has adequate funding, personnel, 

implementation authority, and other resources to implement the retrofit project on schedule. 
30

Specific Recommendations: 

• The state should ensure it has allocated appropriate funds from a reliable funding source. 

• The state should ensure that the retrofit fleet operators correctly install, operate, and maintain 

the retrofit technology according to the manufacturer’s recommendations.

o Example: The city transit fleet has 50 buses retrofitted with PM filters. The state 

should ensure that the fleet operators are properly trained to operate, maintain, and 

detect problems with the PM filters.

• The state should assess and verify the status of the retrofitted vehicles, engines, and/or 

equipment and the associated emission reductions, as applicable. 

3.2 How can the estimated emission reductions be used for SIP purposes?

 For your RFP, attainment, or maintenance SIP strategy, you can use emission reductions 

which are expected to be generated from the retrofit project by applying the following criteria:

• Emission reductions would be calculated as required in the SIP process for a given pollutant 

and NAAQS, either in tons per year, tons per pollutant season, or tons per day. For example, 

NOx reductions from retrofit projects would be calculated in an ozone SIP for tons reduced 

per day for a typical summer day. In contrast, PM2.5 reductions would be calculated on a tons 

per year basis for SIP inventories for the annual PM2.5 NAAQS; state and local agencies 

should consult their EPA Region and/or applicable guidance on what is appropriate for SIP 

inventories for the 24-hour PM2.5 NAAQS. Any calculations would consider factors that may 

affect emission reductions and their surplus status over time, including changing patterns of 

operations or use, vehicle deterioration factors, equipment useful life, and government 

emission standards. 

• Emission reductions would be commensurate with the level of activity from retrofitted 

vehicles, engines, or equipment within a given nonattainment or maintenance area as 

described in Section 3.1.4. For example, if retrofitted vehicles are operated exclusively within 

the nonattainment or maintenance area, the associated reductions from retrofit technology 

would also be assumed to occur within such an area. However, some fleets may leave the 

nonattainment or maintenance area for some portion of their operation. Such fleets may be 

considered as part of a retrofit project, but the emission reductions claimed are limited to the 

activity that is expected to occur from such vehicles within the nonattainment or maintenance 

area, as well as those accounted for in the inventory. 
31

3.3 What would a state submit to EPA to meet the requirements for incorporating 

a retrofit project in a SIP?

A state would submit to EPA a written document which does the following: 

• Identifies and describes the retrofit project and its implementation schedule to reduce 

emissions within a specific time period;

• Contains estimates of emission reductions attributable to the project, including the 

methodology and other technical support documentation used. EPA requires MOVES for onroad vehicles17 and recommends NMIM for nonroad vehicles and equipment for assessing the 

emission reductions from retrofit projects for SIP purposes; 

• Either contains federally enforceable requirements for you to implement, track, and monitor 

the measure; or if the measure is developed under the VMEP guidance, the state includes an 

enforceable commitment to monitor, assess and report the resulting emission reductions; 

• If the measure is developed under the VMEP guidance, includes an enforceable commitment 

to remedy any SIP emission shortfall in a timely manner in the event that the measure does 

not achieve the estimated emission reductions; and

• Meets all other requirements for SIPs under Clean Air Act sections 110 and 172. 

3.4 Are there any other types of SIPs that could include emission reductions from 

retrofit projects?

 Yes. As indicated in Section 3.2, state air quality agencies can include retrofit projects in 

RFP SIPs, attainment demonstrations, and maintenance plans. However, if a state wants to 

encourage adoption of retrofit projects prior to developing one of these kinds of SIPs, the state could 

create a SIP submission that contains only retrofit projects, which would be relied upon in a future 

SIP. The advantage of creating such a SIP submission now is that a state could secure retrofit 

projects with adequate federal, state, and/or local funding for a future RFP SIP, attainment 

demonstration, or maintenance plan. 

A state air agency that is interested in creating such a SIP submission specifically for a 

retrofit project or projects must consult with MPOs, the state DOT, and any other state or local 

transportation agencies in its development. The conformity regulation at 40 CFR 93.105 requires 

consultation on the development of SIPs. 

 

17 See 75 FR 9411, Official Release of the MOVES2010 Motor Vehicle Emissions Model for Emissions Inventories in 

SIPs and Transportation Conformity at http://www.gpo.gov/fdsys/pkg/FR-2010-03-02/html/2010-4312.htm. 
32

Note that a SIP submission that contains only retrofit projects would still have to meet the 

requirements discussed in this Section. State or local agencies that are interested in this option 

should consult their EPA Region as well as the MPOs and others involved in the interagency 

consultation process. 

3.5 What monitoring and record keeping should occur to document retrofit 

emission reductions?

3.5.1 What should the state air agency monitor and record? 

Clean Air Act section 110(a)(2)(C) requires that submitted SIPs "include a program to 

provide for the enforcement of the measures" that the state adopts to reduce emissions. A state's 

decision about how a measure needs to be enforced will depend on the state's knowledge of the 

emission reductions achieved by the measure. Therefore, this Clean Air Act requirement for a 

program that provides for enforcement makes it necessary for states to monitor measures that they 

include in their SIPs, such as diesel retrofits. 

EPA recommends that for each retrofitted vehicle, engine, or piece of equipment generating 

emission reductions, the state air agency or another responsible party should monitor and record the 

following information, where applicable, for each time period for which an emission reduction is 

generated:

• Actual use and operation and maintenance of the retrofitted or repowered 

vehicles/engines/equipment and retrofit technology 

• Proper installation of retrofit technology or repowered engine at project initiation

• Proper training of vehicle operators and technicians at project initiation 

• For replacements, document the permanent destruction, disabling, or rebuilding of the engine 

to meet current emissions standards 

Monitoring and recording these data are ways to ensure that the statute is met. A state can propose 

other methods of monitoring and recording data in its SIP submission, and EPA would consider 

whether or not it would be sufficient to meet Clean Air Act requirements.

3.5.2 How long should the state air agency maintain records? 

 Under 28 U.S.C. 2462, the government has five years to bring an enforcement action or suit 

for the failure to implement a measure in a SIP. Based on this statute of limitations, all information 

to be monitored and recorded in accordance with this guidance for existing SIP requirements should 

be maintained by the state air agency or another responsible party for a period of no less than five 

years, or longer where appropriate. 
33

3.6 What validation and reconciliation should occur for emission reductions in 

SIPs approved under the VMEP guidance?

 The SIP submission for a voluntary measure should contain a description of the evaluation 

procedures and time frame(s) in which the evaluation of SIP reductions will take place. Once the 

voluntary control measure is in place, emission reductions should be evaluated by the state or local 

agency as required to validate the actual emission reductions. The state or local agency should 

submit the results of the evaluation to EPA in accordance with the schedule contained in the SIP. If 

the review indicates that the actual emission reductions are not consistent with the estimated 

emission reductions in the SIP, then the amount of emission reductions in the SIP should be adjusted 

appropriately or applicable remedial measures should be taken under the VMEP guidance. See 

EPA’s VMEP guidance for further information regarding validation and reconciliation requirements 

for such measures.

3.7 What penalties can EPA impose for not complying with Clean Air Act 

requirements?

 Use of this guidance does not relieve you of any obligation to comply with all otherwise 

applicable CAA requirements, including those pertaining to the crediting of emission reductions for 

your SIP, such as for your attainment demonstration or maintenance plan. Violations of CAA 

requirements are subject to administrative, civil, and/or criminal enforcement under Section 113 of 

the CAA, as well as to citizen suits under Section 304 of the CAA. The full range of penalty and 

injunctive relief options would be available to the federal or state government (or citizens) bringing 

the enforcement action. 
34

SECTION 4: USING EMISSION REDUCTIONS IN 

TRANSPORTATION CONFORMITY DETERMINATIONS

4.1 What is transportation conformity?

 Transportation conformity is required under Clean Air Act section 176(c) (42 U.S.C. 

7506(c)) to ensure that federally supported highway and transit project activities are consistent with 

(“conform to”) the purpose of the SIP. Conformity to the purpose of the SIP means that 

transportation activities will not cause new air quality violations, worsen existing violations, or delay 

timely attainment of the relevant NAAQS and interim milestones. EPA’s transportation conformity 

rule (40 CFR Parts 51 and 93) establishes the criteria and procedures for determining whether 

transportation plans, TIPs or projects conform to the SIP. Transportation conformity applies to areas 

that are designated nonattainment, and those redesignated to attainment after 1990 (“maintenance 

areas”) for transportation-related criteria pollutants. Some areas that are currently doing 

transportation conformity could benefit from retrofit project reductions, including ozone, PM2.5, and 

PM10 nonattainment and maintenance areas. 

 

In urban areas, transportation planning and conformity determinations are the responsibility 

of the MPO. MPOs are responsible for updating and revising the transportation plan and TIP on a 

periodic basis, as well as making transportation plan and TIP conformity determinations. Such a 

determination includes a regional emissions analysis that shows that the emissions expected from the 

area’s planned transportation system do not exceed the motor vehicle emissions budget (“budget”) 

set by the SIP for meeting RFP, attainment, or maintenance requirements. In cases where an area 

does not yet have a SIP in place, a different type of emissions test18 is used for conformity. After an 

MPO’s conformity determination, the U.S. DOT must also determine conformity of the 

transportation plan and/or TIP. The interagency consultation process is required to be used when 

developing transportation plans, TIPs, conformity determinations, and SIPs, and the process includes 

MPOs, state departments of transportation, public transit agencies, other transportation agencies, 

state and local air quality agencies, EPA, and DOT (40 CFR 93.105). 

4.2 What kinds of retrofit projects can be used in transportation conformity 

determinations?

 MPOs may use emission reductions in transportation plan and TIP conformity determinations 

that result from either:

 

18 In areas without SIP budgets, an interim emissions test(s) must be met. These tests are the “baseline year test” and the 

“build/no-build test.” See 40 CFR 93.119 for more on these requirements. In areas with SIP budgets, a budget test must 

be met, pursuant to 40 CFR 93.118.
35

• On-road vehicle and engine retrofit projects, or 

• Nonroad vehicle, engine, and equipment retrofit projects. 

On-road vehicle retrofit projects can be used in regional emissions analyses for transportation 

conformity determinations, since transportation conformity includes emissions and reductions from 

on-road sources. Requirements are discussed in Section 4.3. 

 Although the emissions from nonroad sources are separate from on-road vehicles in a SIP 

inventory, the emission reductions that result from nonroad retrofits can still be applied in 

transportation conformity. When appropriate and desired, the transportation conformity rule allows 

options for including reductions from nonroad retrofit projects, such as the retrofitting of highway 

construction equipment, in a transportation conformity determination. See Sections 4.4 through the 

end of this section for further information on options for including the emission reductions from 

nonroad retrofit projects in transportation conformity determinations. 

 EPA also notes that reductions from retrofits can be applied as a mitigation or control 

measure in quantitative PM2.5 or PM10 hot-spot analyses for project level conformity determinations. 

See EPA’s Transportation Conformity Guidance for Quantitative Hot-spot Analyses in PM2.5 and 

PM10 Nonattainment and Maintenance Areas at 

www.epa.gov/otaq/stateresources/transconf/projectlevel-hotspot.htm#pm-hotspot. For further 

background on PM hot-spot analyses, the methodology in Section 2 of this guidance can be used for 

such analyses. The remainder of Section 4 and the Appendices focus on applying retrofit reductions 

in transportation plan and TIP transportation conformity determinations (and regional emissions 

analyses).

4.3 How can the emission reductions from on-road retrofit projects be included in 

transportation conformity determinations?

 The transportation conformity rule describes the specific requirements for including emission 

reductions from on-road retrofit projects in a transportation conformity determination. If the 

emission reductions from the retrofit project have been accounted for in the SIP’s motor vehicle 

emissions budget, the MPO would also include the emission reductions from the retrofit project, to 

the extent it is being implemented, when estimating regional emissions for a transportation 

conformity determination. Including the emission reductions in both the SIP’s budget and in a 

conformity determination in this way is not “double-counting,” but correctly accounting for all the 

control measures that are in place.19 

To include the emission reductions from retrofit projects in a conformity analysis, the 

appropriate jurisdictions must be committed to the measure.20 The appropriate level of commitment 

 

19 See 40 CFR 93.122(a) for the requirements regarding what must be included when estimating regional emissions in a 

conformity determination.

20 As stated in Section 1.7 of this guidance, state and local agencies should check with EPA before promulgating any 

state or local regulations or programs mandating retrofit projects, due to potential issues related to Clean Air Act section 

209 requirements. 
36

varies according to the requirements outlined in 40 CFR 93.122(a) which are described as follows: 

• If the retrofit project does not require a regulatory action to be implemented and it is included 

in the transportation plan and TIP with sufficient funding and other resources for its full 

implementation, it can be included in a transportation conformity determination. 

• If the retrofit project requires a regulatory action to be implemented, it can be included in a 

conformity determination if one of the following has occurred: 

o The regulatory action for the retrofit project is already adopted by the enforcing 

jurisdiction (e.g., a state has adopted a rule to require such a project); 

o The retrofit project has been included in an approved SIP; or 

o There is a written commitment to implement the retrofit project in a submitted SIP 

with a motor vehicle emissions budget that EPA has found adequate.21

 If the retrofit project is not included in the transportation plan and TIP or the SIP, and it does 

not require a regulatory action to be implemented, then it can be included in the transportation 

conformity determination’s regional emissions analysis if the determination contains a written 

commitment from the appropriate entities to implement the retrofit project.

Whatever the case, any emission reductions can only be applied in a transportation 

conformity determination for the time period or years in which the retrofit project will be 

implemented. Written commitments must come from the agency with the authority to implement the 

retrofit project. The latest emissions model and planning assumptions must also be used when 

calculating emission reductions, according to 40 CFR 93.110 and 93.111. 

 The interagency consultation process must be utilized (as required by 40 CFR 93.105) to 

discuss the methods and assumptions used to quantify the reductions from the retrofit project. 

Section 2 of this document describes how to quantify emission reductions. 

4.4 How can the emission reductions from nonroad retrofit projects be included 

in transportation conformity determinations?

 There are two options that may be used to reflect reductions from nonroad retrofit projects in 

transportation conformity determinations. The two options are: 

• Apply nonroad retrofit emission reductions as a "safety margin" to the SIP’s motor vehicle 

emissions budgets; or 

 

21 40 CFR 93.118 describes the process and criteria that EPA considers when determining whether submitted SIP 

budgets are appropriate for transportation conformity purposes prior to EPA’s SIP approval action.
37

• Establish a trading mechanism in the SIP to allow emissions to be traded from one emissions 

sector to another. 

Both of these options are allowed by the current transportation conformity rule and are completed 

through the SIP process with consultation among federal, state, and local air quality and 

transportation agencies. An area may decide to pursue one of these options if it is anticipated that 

emission reductions from nonroad retrofit projects may be needed to assure future transportation 

conformity determinations. Note that nonroad retrofit projects that are reflected in a transportation 

conformity determination under either option must meet the conformity rule requirements articulated 

in Section 4.3, in addition to other requirements described below. 

4.5 How is EPA supporting the use of emission reductions from nonroad retrofit 

projects in transportation conformity? 

 EPA recognizes the importance of nonroad retrofit projects in reducing emissions and wants 

to support the process for state and local air and transportation agencies to implement them when 

desired. The remainder of Section 4 and Appendices A through C include additional information for 

including the emission reductions from nonroad retrofit projects in transportation conformity: 

Safety margins. EPA has provided the following: 

• Questions and answers about safety margins, beginning with Section 4.6; 

• Step-by-step process instructions, including a flowchart, for adopting a safety margin – see 

Appendix A; 

• An example of how a safety margin is applied – see Appendix A; 

• A list of areas that have adopted safety margins in the past – see Appendix A; 

Trading mechanisms. EPA has provided the following: 

• Questions and answers about trading mechanisms, beginning with Section 4.11; 

• Step-by-step process instructions, including a flowchart, for adopting a trading mechanism – 

see Appendix B; 

• An example of how a trading mechanism would work – see Appendix B; 

• A model trading rule that interested states could adopt through the SIP – see Appendix C. 

4.6 What is a safety margin? 

 Section 93.101 of the transportation conformity rule defines a “safety margin” as 

“the amount by which the total projected emissions from all sources of a given pollutant are 

less than the total emissions that would satisfy the applicable requirement for reasonable 

further progress, attainment, or maintenance.” 

That is, if an area has a safety margin, it has more emission reductions than necessary to meet the 
38

Clean Air Act goal of RFP, attainment, or maintenance. It can meet the goal with room to spare – a 

margin of safety. Safety margins are calculated for a specific year in the SIP for which a budget is 

established (e.g., the last year of a maintenance plan). 

 The conformity rule allows a safety margin to be allocated to the transportation sector, if the 

SIP explicitly states so (see 40 CFR 93.124(a)). The SIP must state that a specified portion or the 

entire safety margin is available to the MPO and DOT for conformity purposes. Therefore, the 

nonroad retrofit project that creates the safety margin allows the motor vehicle emissions budget to 

increase. 

4.7 When can a safety margin be established in a SIP? 

 An area may include a safety margin from the point at which they develop their SIP 

submission for RFP, attainment, or maintenance, or it may be developed later as a stand-alone SIP 

submission. For example, if an area has more emission reductions from the control measures 

contained in its attainment demonstration than needed to achieve the applicable NAAQS, it could 

establish a safety margin in that attainment demonstration. 

 An area could also develop a safety margin after the SIP has been established. For example, 

if an area’s attainment demonstration contains control measures that are sufficient to attain, then any 

other measures that reduce emissions adopted later, such as nonroad retrofit projects, would 

potentially create a safety margin. Alternatively, an area that already has a safety margin in its SIP 

could add to it by adopting a new nonroad retrofit project. 

 

Whatever the case, any SIP that incorporates a safety margin must meet all applicable SIP 

requirements, including being based on the most recent emissions estimates available at the time the 

SIP safety margin is developed. For example, an existing safety margin in an ozone maintenance 

plan could be increased to account for new retrofit projects in a given year, assuming the existing 

safety margin is still applicable. Under this example, EPA's approval would be required before the 

increased SIP safety margin could apply for transportation conformity purposes, since revisions to 

existing approved SIPs cannot apply until EPA approves them (40 CFR 93.118(e)(1)). 

 

4.8 What are the benefits of establishing a safety margin at the time that an RFP 

SIP, attainment demonstration, or maintenance plan is initially submitted?

While a safety margin can be developed after a SIP is established, it makes sense for areas 

that are currently developing a SIP to include a safety margin in that SIP, if possible, instead of 

adding it later. A safety margin that is included in an initial control strategy SIP (e.g., an RFP SIP or 

attainment demonstration) or maintenance plan could be used for conformity on the effective date of 

EPA’s adequacy finding. But if a safety margin is developed later, the state would need to revise the 

SIP. If EPA has already approved the initial SIP, the revised SIP that includes the safety margin 
39

could not be used in conformity until it is approved, as noted above. Including a safety margin in a 

SIP submission as it is developed saves time and effort throughout the process. 

4.9 Why should an area start developing a safety margin now?

 Areas that are currently developing attainment demonstrations or maintenance plans should 

consider whether they want to adopt programs to retrofit nonroad vehicles, engines, and equipment 

and include them in these SIP submissions, because doing so now can save time and may allow their 

use in conformity sooner. The conformity rule requires that consultation occur during the 

development of a SIP (40 CFR 93.105(a)(1)). State air agencies should consult with the relevant 

MPOs, DOT, and other agencies as appropriate in order to determine whether a safety margin might 

be needed for conformity. 

 

Several nonattainment areas have already established safety margins through the SIP process 

to assist in making future transportation conformity determinations. See Appendix A for further 

information. 

4.10 What are the features of a safety margin? 

 In order for EPA to approve the allocation of a safety margin to a motor vehicle emissions 

budget(s), the following SIP and transportation conformity requirements would have to be met: 

• The entire SIP must continue to demonstrate its Clean Air Act purpose, pursuant to the statute 

and 40 CFR 93.124(a). Before the emissions level of a motor vehicle emissions budget is 

increased, the state air agency would need to determine that there is a safety margin, including 

any surplus emission reductions from any nonroad retrofit projects. The agency would also 

need to ensure that emissions inventories of on-road, nonroad and other sources are consistent 

with the SIP’s demonstration. 

• The calculation for the nonroad retrofit projects and any safety margin would be based on the 

latest information and models available at the time the SIP is developed. The method for 

calculating a safety margin may vary depending upon whether new air quality modeling is 

performed or if a less rigorous demonstration is adequate (e.g., maintenance areas that are 

establishing a safety margin based on staying below the emissions level(s) for a previous year 

of clean monitoring data for the maintenance demonstration).

• The SIP must clearly allocate the safety margin to the motor vehicle emissions budget(s) for 

use in transportation conformity determinations, pursuant to 40 CFR 93.124(a); 

• Retrofit projects reflected in a safety margin must be assured, permanent, and enforceable, 

have adequate funding and resource commitments, and be on schedule; and 
40

• The safety margin must meet Clean Air Act section 110(l) and any other applicable SIP 

statutory and regulatory requirements. 

See Section 3 for more information about including a retrofit project in a SIP. See Appendix A for 

more detailed information on establishing and implementing a safety margin.

 EPA notes that the allocation of a safety margin to the on-road transportation sector may 

limit that area’s ability to allow future growth in emissions from other source sectors (e.g., stationary 

sources). State and local transportation and air quality agencies and other affected parties should 

always consult on whether a safety margin is appropriate for transportation conformity in a given 

area.

4.11 What is a trading mechanism?

 A trading mechanism is a process established through the SIP that allows emission reductions 

achieved in another source sector – such as the nonroad sector – to be used for demonstrating 

transportation conformity. Before emission reductions can be traded from one sector to another, the 

SIP must include a trading mechanism to allow the trading to occur. 

 This option is supported by 40 CFR 93.124(b) as well as preamble language. Section

93.124(b) states:

 

“A conformity demonstration shall not trade emissions among budgets which the 

applicable implementation plan (or implementation plan submission) allocates for 

different pollutants or precursors, or among budgets allocated to motor vehicles and 

other sources, unless the implementation plan establishes appropriate mechanisms for 

such trades.” 

 In the preamble of the November 24, 1993 transportation conformity rule, EPA stated that 

"[t]he state may choose to revise its SIP emissions budgets in order to reallocate emissions among 

sources or among pollutants and precursors. For example, if the SIP is revised to provide for greater 

control of stationary source emissions, the State may choose to increase the motor vehicle emissions 

budget to allow corresponding growth in motor vehicle emissions (provided the resulting total 

emissions are still adequate to provide for attainment/maintenance of the NAAQS..." (58 FR 62196). 

EPA believes that this preamble and 40 CFR 93.124(b) clearly allow trading mechanisms to be 

established to ensure future transportation conformity determinations, when desired. 

 EPA’s Economic Incentive Program (EIP) guidance also discusses trading among different 

sources.22 The primary concerns articulated in that guidance are: 1) to ensure that emission 

reductions are only used in transportation conformity if they are truly reductions to overall air 

 

22EPA’s January 2001 guidance entitled, "Improving Air Quality with Economic Incentive Programs," provides 

additional information on developing and implementing economic incentive based control strategies. This guidance is 

available at: www.epa.gov/ttn/oarpg/t1/memoranda/eipfin.pdf . See Appendix 16.10 of the 2001 guidance for further 

information regarding the transportation conformity requirements that need to be met by an EIP trading program.
41

quality (i.e., are not offset by emissions increases in other emission sources); and 2) to ensure that 

double-counting does not occur among source categories in the SIP or in transportation conformity. 

EPA must approve a SIP that creates a trading mechanism before emission reductions can be traded 

for transportation conformity determinations. 

4.12 When can a trading mechanism be established in a SIP?

 A trading mechanism can be established by a state and approved by EPA into the SIP for a 

nonattainment or maintenance area at any time. 

• A trading mechanism that would allow trading of emission reductions from nonroad retrofit 

projects for transportation conformity purposes could be submitted by a state and approved by 

EPA prior to the submission of an area’s RFP SIP, attainment demonstration, or maintenance 

plan. 

• Alternatively, a state could decide to submit a trading mechanism as part of an RFP SIP, 

attainment demonstration, or maintenance plan for a given area. 

4.13 Why develop a trading mechanism as a stand-alone SIP revision? 

The advantage of developing a trading mechanism as a stand-alone SIP instead of including it 

in a required ozone or a PM2.5 SIP is that doing so allows trading to happen sooner than if the 

trading mechanism was combined with a larger SIP such as an RFP plan, an attainment 

demonstration, or a maintenance plan. Where developed as a stand-alone SIP, a trading mechanism 

allows emission reductions from a nonroad retrofit project to be applied in conformity during the 

time period before one of these larger SIPs is submitted and found adequate. For example, assuming 

it has a SIP trading mechanism in place, if an ozone area could not pass a NOx budget contained in 

its ozone attainment demonstration, the area could program funds for a nonroad retrofit project and 

apply the emission reductions in a conformity determination. A stand-alone SIP based on the model 

trading rule provided in this guidance document can be developed and approved by EPA through 

parallel processing23 the SIP. 

4.14 What would a SIP with a trading mechanism look like?

 EPA developed a model trading rule to allow states to use nonroad emission reductions in 

 

23 The term “parallel processing” means that EPA, at the request of the state, begins to process a SIP submission (either 

to approve it or find its budgets adequate) before the state has finalized it. EPA’s process and the state’s process are 

occurring “in parallel.” Specifically, EPA would begin to review the SIP trading mechanism while the state’s public 

comment period is running, but must wait until the state submits its final SIP trading mechanism before taking a final 

SIP action. See Appendices A and B for more detail on how parallel processing works. 
42

transportation conformity. States that are interested in establishing a trading mechanism merely 

need to copy the model rule and fill in the blanks as appropriate (e.g., the state would insert the 

appropriate names of state air quality agencies and MPOs), and can adopt it into their SIPs. The 

model rule is found in Appendix C of this guidance document. EPA developed this model rule in 

consultation with DOT and state and local air quality and transportation organizations. States that 

adopt the model rule can expect a streamlined SIP approval because the model rule meets Clean Air 

Act requirements. The model rule is just one way to write a regulation for a trading mechanism for 

conformity. A state could deviate from this model rule, but the more the state deviates from the 

model rule language, the more time it may take for EPA’s final SIP action. 

4.15 What are the features of a trading mechanism? 

 In order for EPA to approve a trading mechanism, the following SIP and transportation 

conformity requirements would have to be met: 

• The entire SIP must continue to demonstrate its Clean Air Act purpose when trades are 

allowed, pursuant to the statute and 40 CFR 93.124(b). When the trading mechanism is 

developed, the state air agency would need to ensure that trades can occur, while ensuring that 

emissions inventories from all sources continue to be consistent with the SIP’s demonstration. 

• A state regulation must be developed that describes in adequate detail the scope and process 

for making trades so that the trading mechanism can be implemented as intended. Such a 

regulation would also provide that all trades become enforceable through the trading 

mechanism approved into the SIP in the event that reductions are not otherwise enforceable. 

• Trades must be based on nonroad retrofit projects that result in a net emission reduction, 

which must consider the emissions produced by the vehicles, engines, and equipment and the 

impact of any retrofit technology. Individual trades cannot exceed the net emission 

reductions of a retrofit project. 

• The trading mechanism would ensure that individual trades must be made only when surplus 

emission reductions exist. Trading cannot result in “double-counting” of reductions already 

accounted for in the SIP and conformity determinations, . 

• Reductions can be taken only for years of the regional emissions analysis where reductions 

are achieved. 

• The trading mechanism must meet any other applicable SIP and conformity requirements (for 

example, control programs that produce emission reductions relied on in a conformity 

determination must be assured and enforceable, have adequate funding and resource 

commitments, and be on schedule – see 40 CFR 93.122(a)).24 

 

24 EPA notes that SIPs that establish a trading mechanism are required to meet Clean Air Act section 110(l) 

requirements, similar to all other SIPs for other purposes. However, by definition, the trading mechanisms described in 
43

 

See Appendix B for more information on implementing a trading mechanism and Appendix C for a 

model trading rule that could be incorporated into the SIP.

4.16 Does the public have the opportunity to comment on trading? 

 

Yes, the public does have the opportunity to comment at two distinct points in the process: 

• First, the public can comment on the trading mechanism itself at the point when it is 

incorporated into the SIP. Any time a state prepares a SIP, it must give the public an 

opportunity to comment on it before the final submission is sent to EPA. In a situation where 

a state adopts a regulation separately from an RFP or attainment SIP or a maintenance plan, 

the public will also have the opportunity to comment on the state’s regulation. In addition, 

when EPA proposes to approve the SIP in the Federal Register, the public again has the 

opportunity to comment to EPA. The approval process, including these public comment 

periods, is covered in further detail in Appendix B. 

• Second, the public has the opportunity to comment on individual trades that employ the SIP 

trading mechanism during the public comment period on a transportation plan or TIP 

conformity determination. The conformity regulation at 40 CFR 93.105(e) requires that the 

public be given access to technical and policy information considered in a conformity 

determination at the beginning of the public comment period and prior to taking formal action 

on a transportation plan/TIP conformity determination. If an MPO relies on nonroad retrofit 

emission reductions that are the result of a trade, information about that trade would belong in 

such technical and policy information that is made available for public review. Under the 

model trading rule in Appendix C of this document, the MPO would be required to document 

the description of the retrofit project; its enforceability, funding sources, and implementation 

schedule; and details regarding emission reduction calculations. In addition, the model rule 

would require that the state air agency document its concurrence (e.g., through a letter), which 

the MPO could then reference in its transportation plan/TIP conformity determination. If a 

state adopts any trading mechanism, all of the information described above would be made 

available to the public as part of any transportation plan/TIP conformity determination.

25 

4.17 Are there any examples of transportation conformity-related trading 

mechanisms that were approved into the SIP?

 

this guidance document should meet section 110(l) requirements since emissions increases would not occur as a result of 

trades for transportation conformity purposes.

25 Note that if a state decides to substantially alter the model rule or create a different one, the trading mechanism would 

still need to provide the public with access to information via the conformity determination to meet 40 CFR 93.105(e). 

EPA would examine any trading mechanism with regard to this point during the SIP process. 
44

Yes, a couple of areas adopted another type of trading mechanism for conformity purposes. 

The provision of the transportation conformity rule that allows trading among source sectors also 

allows trading among motor vehicle emissions budgets of pollutants and precursors. Both the San 

Joaquin Valley and Salt Lake City adopted trading mechanisms that established trading between 

budgets for directly-emitted PM10 and NOx.26

 Though these trading mechanisms applied to the trading of on-road mobile precursors and 

pollutants rather than among source sectors, they have provided EPA with valuable experience in 

developing a trading mechanism through the SIP process. EPA has applied this experience to the 

development of the model trading rule found in Appendix C. In addition, Salt Lake City’s trading 

mechanism was needed as soon as it could be approved, so EPA and the State of Utah worked 

together to expedite its approval into the SIP. 

4.18 Are there any other ways to establish a trading mechanism for a nonroad 

retrofit project?

Yes. Sections 4.11 through 4.17 and Appendices B and C address establishing a trading 

mechanism that, once adopted into a SIP, would allow emission reductions from any nonroad retrofit 

project to be traded to the transportation sector. However, another possibility is for a state to adopt a 

SIP that allows trading of emission reductions from only a specific project (or projects). This type of 

SIP would look similar to the type of SIP submission described in Section 3.4 in that it would 

contain the description of, and emission reductions from, a specific project (or projects). It would 

also explicitly state the portion of the retrofit emission reductions that are available to be used in 

transportation conformity determinations. The advantage of creating such a SIP submission now is 

that a state could secure specific retrofit projects with adequate federal, state, local, or private 

funding for a future conformity determination. Where a SIP specifically states that a certain number 

of tons of retrofit reductions are to be preserved for use in future conformity determinations, such 

reductions would not be available for use in any other SIP demonstrations such as RFP or attainment 

demonstrations. 

State or local agencies that are interested in this option should consult with their EPA Region

as well as the MPOs and others involved in the interagency consultation process. 

4.19 How can I get additional technical assistance in using the emission 

reductions from a nonroad retrofit project in transportation conformity?

 

26 These trading mechanisms differed according to the atmospheric conditions in each area. An interpollutant trading 

mechanism must include a scientific rationale, as well as comply with Clean Air Act section 110(l) by showing that the 

trading mechanism will not interfere with any applicable Clean Air Act requirement. See 67 FR 44065 for EPA’s 

approval of Salt Lake City’s trading mechanism; 69 FR 30006 for EPA’s approval of San Joaquin Valley’s PM10 SIP 

that includes the trading mechanism.
45

State and local agencies are strongly encouraged to consult early with their respective EPA 

Region if they are considering applying a safety margin or developing a trading mechanism in the 

SIP for transportation conformity purposes. EPA is available to provide such technical assistance so 

that SIP submissions can be processed efficiently. See Section 1.9 for more information regarding 

EPA contact information.
46

SECTION 5: USING EMISSION REDUCTIONS IN GENERAL 

CONFORMITY DETERMINATIONS

5.1 How can the estimated emission reductions be used for general conformity 

determinations?

 General conformity applies in nonattainment and maintenance areas to emissions from all 

federal actions or activities not covered by the transportation conformity program, such as military 

base expansions or approval of airport expansion projects. The general conformity regulation (40 

CFR 51.851 and 93.150-165) prohibits federal agencies from taking, or supporting in any way, 

actions in areas that are designated nonattainment or maintenance for any criteria pollutant without 

demonstrating that the action will not 1) cause or contribute to any new violation of any NAAQS in 

any area; 2) increase the frequency or severity of any existing violation of any NAAQS in any area; 

or 3) delay timely attainment of any NAAQS or any required interim emission reductions or other 

milestones in any area. The general conformity regulation applies to the total foreseeable direct and 

indirect emissions increases from the action or activity including both construction and operational 

emissions. Indirect emissions can include those from vehicles servicing a federal facility or 

activities supported by federal funds. 

 To reduce the regulatory burden on insignificant actions, the regulation establishes a number 

of exemptions for categories of actions or activities known to have insignificant emissions increases 

or whose emissions fall below certain de minimis levels. The general conformity rule establishes de 

minimis emission levels based on the severity of the nonattainment problem. If the net increase in 

total direct and indirect emissions from a federal action is below the de minimis levels, the federal 

agency does not have to make a conformity determination for the action. 

If the net increase in emissions is above the de minimis levels and the project is not otherwise 

exempt, the federal agency must determine that the action or activity will conform to the SIP. 

Because the general conformity regulation applies to a wide variety of actions or activities, the rule 

provides a number of methods to demonstrate conformity. Two methods, mitigation and offsetting 

of emissions increases, require emission reductions from sources which may, or may not be directly 

connected to the federal action or activity.

5.2 How can retrofit projects be used to meet the general conformity 

requirements? 

There are some fleets of vehicles that are not considered in transportation conformity 

determinations, and instead considered in general conformity determinations. Some examples 

include a fleet of trucks at a military base, or vehicles that operate only within the boundary of a 

commercial airport. Since a retrofit project for such a fleet would not be increasing emissions, the 

implementation of a retrofit project would not be subject to general conformity requirements. 

Additionally, in many cases, a federal action would not be needed to implement such a project. 
47

However, emission reductions generated by diesel retrofit projects could be used in a number of 

ways in general conformity determinations, such as: 

• Diesel engine retrofits could be used to mitigate or offset emissions increases caused by a 

federal action. For example, the retrofitting of diesel airplane tugs at a military air station 

could be used to mitigate a portion of the emissions increases associated with an expansion 

project at the military base or the retrofitting of package delivery vehicles could be used to 

offset the emissions increases caused by a base expansion.

• The Vision 100-Century of Aviation Reauthorization Act of 2003 (P.L. 108-176), directed the 

FAA to establish a national program to reduce airport ground emissions at commercial service 

airports located in air quality nonattainment and maintenance areas. The Voluntary Airport 

Low Emissions (VALE) program allows airport sponsors to use certain funds to finance low 

emission vehicles, refueling and recharging stations, gate electrification, and other airport air 

quality improvements (including retrofit projects). The emission reductions generated by 

these measures are kept by the airport sponsor and may only be used for current or future 

general conformity determinations. To be used in a general conformity determination, 

emission reductions must be voluntary and cannot otherwise be used to meet other applicable 

air quality attainment and maintenance requirements. Emission reductions must also be 

“permanent” in that they continue to occur at the estimated level throughout the lifetime of the 

vehicles and infrastructure.

A federal or federally permitted facility which is subject to the general conformity 

regulation, such as a military base or a commercial airport, could institute an agreement with a 

state to operate the facility within a facility-wide emissions budget. Emission reductions from 

a fleet retrofitting project could ensure emissions increases generated by future actions would 

not exceed the facility-wide budget and thus would conform to the SIP. A demonstration that 

emissions from a new action do not exceed the facility-wide emissions budget could be used 

in a general conformity determination. 

5.3 Is a SIP revision required if a source with a facility-wide emissions budget 

wants to implement a retrofit project at the facility?

 No, a SIP revision would not be required, if a source with a facility-wide emissions budget 

established for general conformity purposes decided to retrofit vehicles or equipment used at the 

facility. The facility’s emissions budget would have included emissions of all relevant pollutants 

and/or precursors from all sources on the facility including the pre-retrofit emissions from the 

vehicles and/or equipment that are included in the retrofit project. Therefore, the emission 

reductions from a retrofit project can be used to show that the facility remains within its budget 

without a SIP revision. 
48

5.4 What requirements would potentially limit the use of retrofit projects in the 

general conformity program?

 Emission reductions used as part of the (1) project design, (2) mitigation measures, (3) offset, 

or (4) in future conformity determinations, must be surplus, permanent, quantifiable and enforceable 

as described in the General Conformity rule and Section 3 of this document. In addition, the 

emission reductions must be reviewed by EPA, state, tribes and local air quality agencies and the 

public as part of the review of the general conformity determination and meet the following criteria: 

• The retrofit project must be identified and the process for implementation and enforcement 

must be explicitly described.

• Prior to determining conformity, the federal agency making the determination must obtain 

written commitments from the appropriate entities (e.g., fleet operator, state or city official, 

private company official or MPO) to implement the retrofit project as a mitigation measure. 

• The reductions from the retrofit project must be contemporaneous with the project emissions 

increases, specifically, the reductions must occur in the same calendar year as the increases.

• The implementing entity/official responsible for implementing the retrofit project and any 

persons or agencies voluntarily committing to mitigation measures must comply with the 

obligations of such commitments. 

• If the federal action involves licensing, permitting or approving an action of another 

governmental or private entity, the federal agency must condition its approval action on the 

other entity meeting all mitigation commitments.

• If the retrofit project is modified resulting in an increase in emissions, the new mitigation 

measures must continue to support the initial general conformity determination and must 

undergo public review. 

5.5 Why are SIPs required for use of nonroad retrofits in transportation 

conformity but not required for general conformity?

 With regard to nonroad retrofit projects, a SIP establishing either a trading rule or safety 

margin is required in order for emission reductions from such projects to be used in transportation 

conformity determinations because nonroad emissions are not included in an area’s on-road motor 

vehicle emissions budget (40 CFR 93.124(a) and (b)). The SIP provides the authority to use nonroad 

emission reductions as part of a demonstration that an area is meeting its on-road emissions budgets. 

In contrast, a facility-wide emissions budget established for general conformity purposes would 

include emissions from all sources at the facility including the pre-retrofit emissions from the 

vehicles and/or equipment that are included the retrofit project and the facility budget is within the 

SIP’s allowable emission budget. Therefore, the emission reductions from the retrofit project can be 
49

used to show that the facility remains within its budget without a SIP revision. 
50

APPENDIX A: 

ESTABLISHING AND USING A SAFETY MARGIN TO 

ALLOW EMISSION REDUCTIONS FROM NONROAD 

RETROFITS TO BE USED IN TRANSPORTATION 

CONFORMITY DETERMINATIONS

 This appendix provides detail about how a state could apply the emission reductions from a 

nonroad retrofit project or projects in a conformity determination via a safety margin. 

A.1 What is an example of establishing and using a safety margin? 

 

 Suppose a 1997 PM2.5 nonattainment area develops a draft maintenance plan that shows the 

area could emit 400 tons per day of NOx from all sources, and still maintain the NAAQS in the last 

year of the maintenance plan, 2025. The area’s total NOx SIP inventory for 2025 is:

 Nonroad: 100 tons per day 

 On-road: 100 tons per day 

 Stationary sources: 100 tons per day 

 Area sources: 100 tons per day

Initial total maintenance SIP inventory: 400 tons per day 

If the area submitted this draft SIP without a safety margin, this SIP would have a 2025 NOx motor 

vehicle emissions budget of 100 tons per day, which is the on-road portion of the 2025 NOx 

inventory. 

 

 However, the MPO, in consultation with others, decides to spend some of its CMAQ and 

other funding to retrofit nonroad transportation construction equipment. The MPO consults with the 

state air agency, who agrees that the retrofits could be used to create a safety margin, since the area 

can demonstrate maintenance without these additional reductions. The MPO decides to retrofit a 

number of bulldozers, front loaders, and backhoes and estimates that the total emission reductions 

from these retrofits will be 5 tons per day in 2025. The state air agency reviews these calculations 

and concurs that these reductions are surplus. Therefore, after consultation, it adjusts the NOx 

inventory in its draft maintenance plan for 2025 as follows: 

 Nonroad: 95 tons per day (i.e., 100 minus 5 tons for new 

retrofit) 

On-road: 105 tons per day (i.e., 100 plus 5 tons for new 

retrofit) 

Stationary sources: 100 tons per day 

 Area sources: 100 tons per day

Final total maintenance SIP inventory: 400 tons per day 
51

The state submits a final SIP that includes a 5 ton per day safety margin and specifically states 

in the SIP that it is allocated to the motor vehicle emissions budget. Therefore, the final budget is 

105 tons per day: 

 On-road: 100 tons per day 

 Safety margin: 5 tons per day

Total available for transportation: 105 tons per day (the final budget) 

Once the SIP has been submitted and found adequate by EPA, the MPO uses the new 2025 NOx 

budget of 105 tons per day. This new budget would apply to all conformity determinations for all 

analysis years 2025 and later, for as long as this motor vehicle emission budget is in place without 

other future budgets. If the MPO later wanted to fund additional nonroad retrofit projects and use 

the additional reductions for conformity determinations, they would either have to work with the 

state to revise the safety margin in the SIP or implement a SIP trading mechanism (as discussed in 

Section 4 and Appendix B). 

A.2 What is the most expeditious process for establishing a safety margin that 

results from a nonroad retrofit project? 

An area that wants to include a safety margin in its SIP from a retrofit project or projects 

would follow the following steps. (See Figure 1 at the end of this appendix for a flowchart that 

depicts these steps.) These steps assume that EPA has not yet approved a SIP submission that 

establishes budgets that the safety margin amends, that is, the safety margin is included in the initial 

RFP SIP, attainment demonstration, or maintenance plan that the state submits. Therefore, the 

budgets that include the safety margin can be used as soon as EPA finds them adequate. However, if 

the area has an approved SIP with a motor vehicle emissions budget and the state submits a SIP with 

a safety margin that would change the budget, the revised budget could not be used until EPA 

approves the SIP. 

• Agencies consult and decide on the project. The process would begin with the MPO and 

state air agency discussing the ability to create a safety margin by retrofitting nonroad 

vehicles, engines, and equipment and the scope of the retrofit project(s) that could contribute 

to the safety margin. There may be some areas where a safety margin cannot be created; in 

these cases nonroad retrofit projects may be even more important for the area’s SIP. 

Assuming that the nonroad retrofit project is funded at least in part with CMAQ dollars, the 

MPO (or state DOT) would need to determine the timing of the project, number of vehicles, 

engines, or equipment to be retrofitted, and the retrofit technology that would be applied 

because the MPO (or state DOT) determines how CMAQ money is spent. The state air 

agency also must be involved because that agency prepares the SIP. 

• Agencies quantify the project. The state air agency, in consultation with the MPO,27 would 

 

27Note that either the state air agency or the MPO could take the lead role in this step.
52

quantify emission reductions from the retrofit project in the year(s) for which the budgets are 

established. (See Section 2 of this guidance for further direction in how a retrofit project can 

be quantified.) 

• State air agency assures SIP criteria are met. The state air agency would determine and 

document that the emission reductions meet all of the criteria necessary for a SIP to include 

emission reductions from a project, specifically, that emission reductions are surplus, 

quantifiable, enforceable, permanent, and adequately supported. (See Section 3 of this 

guidance for further discussion of these criteria.)

• State air agency prepares the safety margin section of the SIP. The state air agency would 

prepare an initial draft of the safety margin section of the SIP; share it with the other parties in 

the interagency consultation process, including the MPO, DOT, and EPA; and revise it as 

necessary once it receives comments from the other agencies. This step could take anywhere 

from one to three months, depending on the nature of the comments that arise through 

interagency consultation. However, if the nonroad retrofit project is well thought-out and 

accurately quantified in the initial draft, it is likely that fewer issues would have to be resolved 

in the consultation process. We believe that the state air agency and the MPO could complete 

the first four steps in one to three months.

• State requests that EPA parallel process the SIP. The state air agency would send the EPA 

region the proposed SIP and in its transmittal letter, request that EPA use parallel processing 

to approve the revision and find the budgets adequate. 

• State publishes proposal. The state must publish its proposal in accordance with its own 

state’s procedures, which would begin a public comment period. In most cases, a state would 

give the public one month to comment, but depending on the circumstances, the public 

comment period could be shortened to 15 days.28

• EPA begins the adequacy process. Once EPA receives an initial SIP submission for parallel 

processing, EPA must review it for adequacy, regardless of whether the safety margin is part 

of a larger SIP demonstration or whether it is a stand-alone submission. EPA uses the criteria 

in 40 CFR 93.118(e) to judge whether a SIP submission is adequate, and follows the process 

described in 40 CFR 93.118(f). EPA begins the adequacy process by notifying the public that 

we have received a SIP submission and beginning a 30-day public comment period. 

• State revises its proposal. The state would revise its proposal as necessary, based on the 

comments it receives during the public comment period. This step may take the state about a 

month. At this point, the state air agency finalizes the SIP and submits it to EPA for approval 

and completion of the adequacy process. 

• EPA completes the adequacy process. After the comment period, EPA must inform the 

 

28Requirements for public hearings on SIPs can be found at 40 CFR 51.102. Section 51.102(g) allows a state to shorten 

its public comment period if it submits a written application to EPA in advance.
53

state of its decision on adequacy and respond to any comments it has received. EPA also 

must publish a notice in the Federal Register. Usually, EPA completes the adequacy process 

within three months, but can expedite it if necessary to a month and a half. 

• EPA adequacy finding effective. The adequacy finding is effective 15 days from the date 

the Federal Register notice is published. At this point, the MPO can use the motor vehicle 

emissions budgets in the SIP submission for conformity. 

A.3 Have any areas included safety margins in their SIPs?

Yes. Many areas have included safety margins in their SIPs that have been used in 

conformity. Below we have listed areas with a safety margin as of the date of this guidance 

document, as well as the pollutant and the type of SIP that included the safety margin. These safety 

margins have resulted from a variety of control measures, rather than nonroad retrofit projects. 

However, the list demonstrates that safety margins have been done with some frequency in the past, 

and that many states have experience with including safety margins in their SIPs. 

Area Pollutant29 Type of SIP 

 

Syracuse, NY CO maintenance plan

TN portion of the Clarksville-Hopkinsville ozone maintenance plan

Greene and Jackson Counties, IN ozone maintenance plan

Evansville, IN ozone maintenance plan

Terre Haute, IN ozone maintenance plan

Muncie, IN ozone maintenance plan

Colorado Springs, CO CO maintenance plan

Denver, CO CO, PM10 maintenance plans

Fort Collins, CO CO maintenance plan

Greeley, CO CO maintenance plan

Longmont, CO CO maintenance plan

Ogden, UT CO maintenance plan

Provo, UT CO maintenance plan 

Salt Lake City, UT CO maintenance plan

San Diego, CA ozone, CO maintenance plans

Bakersfield, CA CO maintenance plan

Chico, CA CO maintenance plan

Fresno, CA CO maintenance plan

Lake Tahoe North Shore, CA CO maintenance plan

Lake Tahoe South Shore, CA CO maintenance plan

Modesto, CA CO maintenance plan

Sacramento, CA CO maintenance plan

 

29 EPA notes that safety margins were also included in maintenance plans for the 1-hour ozone NAAQS by 14 areas.
54

San Francisco-Oakland-San Jose, CA CO maintenance plan

Stockton, CA CO maintenance plan
55
56

APPENDIX B: 

Establishing and Using a Trading Mechanism to Allow Emission 

Reductions from Nonroad Retrofits to Be Used in Transportation 

Conformity Determinations 

 This appendix provides detail about how a state could apply the emission reductions from a 

nonroad retrofit project or projects in a conformity determination via a trading mechanism. 

B.1 What is an example of establishing and using a trading mechanism? 

 Suppose a 2008 ozone nonattainment area develops a draft attainment demonstration that 

shows the area could emit from all sources 400 tons of NOx per day, and still meet the NAAQS in 

2015. The area’s total NOx SIP inventory for 2015 is as follows: 

 Nonroad: 100 tons per day 

 On-road: 100 tons per day 

 Stationary sources: 100 tons per day 

 Area sources: 100 tons per day

Total final attainment SIP NOx inventory: 400 tons per day 

 This SIP would have a 2015 NOx motor vehicle emissions budget of 100 tons per day, which 

is the on-road portion of the NOx inventory. The area also includes a trading mechanism in its SIP, 

and EPA has approved it. 

 During the development of the SIP, the MPO implements a nonroad retrofit project that will 

reduce NOx by 5 tons per day in 2015 and 2 tons per day in 2020. The state air agency and MPO 

concur that these reductions will not be applied to the nonroad inventory used in the SIP, in order to 

use it in a future transportation plan/TIP conformity determination. The state air agency concurs 

through a letter to the MPO that the reductions in 2015 and 2020 are surplus. 

 In this case, the on-road motor vehicle emission budget does not change. In subsequent 

conformity determinations for 2015, the MPO could offset as much as 5 additional tons of on-road 

emissions using the reductions from the nonroad retrofit project in 2015 and as much as 2 tons per in 

2020, based on the latest information available for the retrofit project’s reductions when 

transportation plan/TIP conformity is determined. Retrofit reductions from a trade would be 

estimated based on the latest assumptions and emissions model available at the time of a 

transportation plan/TIP determination (40 CFR 93.110 and 93.111). 
57

B.2 Does a trading mechanism have to be included in a SIP?

 Yes, a state must adopt the trading mechanism (such as the model rule found in Appendix C) 

into its SIP. A state may choose to develop this type of trading mechanism either as a stand-alone 

SIP or as part of a larger SIP submission. 

 EPA believes that the most expeditious process for developing and approving a trading 

mechanism is for a state to use the model trading rule provided in this guidance document in 

Appendix C to develop the mechanism as a stand-alone SIP and for EPA to parallel process its 

approval. As discussed below, it is possible that a trading mechanism based on the model rule may 

be developed by a state and approved by EPA in as little as eight months if it is submitted as a standalone SIP and if EPA parallel processes its approval. The model rule should be used as the basis for 

a state’s trading rule whether the state submits its rule as a stand-alone SIP or includes it in an RFP 

SIP, attainment demonstration, or maintenance plan to expedite the development, review and 

approval of the trading mechanism. 

B.3 What is the most expeditious process for establishing a trading mechanism in 

a SIP, and how long will it take?

To minimize the time needed for the state air agency to develop and EPA to review a SIP 

addressing a trading rule, EPA developed a model rule that is discussed in detail in Appendix C of 

this document. States that want to minimize the time necessary to adopt a trading mechanism into 

their SIP should use EPA’s model rule. If a state decides to draft its own trading rule, it will likely 

take more time to complete the steps outlined below.

 The following paragraphs and the flowchart at the end of this appendix (Figure 2) describe a 

process that can be used to expedite the approval of a trading rule into a SIP. If a state adopts the 

model trading rule and EPA approves the rule in parallel with the state’s adoption of the rule, we 

believe that many states could put a trading rule in place for use in transportation conformity 

determinations in as little as eight months.30

• State prepares proposed SIP. The first step in developing a SIP for a trading rule to allow 

emission reductions from nonroad retrofit projects to be used in transportation conformity 

determinations is for the state air agency to prepare the proposed SIP. To expedite this step, 

the air agency should start with the model trading rule and modify it only to the extent 

necessary. The air agency would need to fill in the information pertinent to the nonattainment 

and maintenance areas in its state where the rule would apply. It is also likely that the state 

air agency would have to format the rule so that it conforms to the state’s requirements for 

 

30Some states may be able to further reduce the time needed if state law allows them to establish a SIP trading 

mechanism through a memorandum of agreement (MOA) or memorandum of understanding (MOU). EPA believes that 

use of an MOA or MOU could save time because an MOA or MOU may require less time for state reviews than a 

regulation. However, EPA notes that this route may not be available to all states primarily because individual state law 

may not allow MOAs or MOUs to be binding on future administrations.
58

regulatory text. The state would also develop language to be included in the preamble of its 

notice of proposed rulemaking. In drafting its preamble language the state may find it useful 

to incorporate as much relevant language as possible from the explanatory text in Appendix C 

that accompanies the model rule. 

Once the air agency has drafted its regulation it would share the draft with the interagency 

consultation partners as required by 40 CFR 93.105(b)(1). The interagency consultation 

partners include representatives of the MPO(s), state and local air quality and transportation 

agencies, and the local or regional offices of EPA, FHWA, and FTA. After the interagency 

consultation partners have reviewed and commented on the draft, the state air agency would 

make any needed revisions. We believe that a state air agency could accomplish these tasks 

in about two months, or perhaps even less, if it closely follows the model rule in Appendix C. 

However, if a state air agency decided to make significant changes or to ignore the model 

rule, these initial steps could take up to eight months. 

• State submits proposed SIP to EPA and requests parallel processing. At this point the air 

agency would transmit the SIP to the EPA Region and request in the transmittal letter that the 

submission be parallel processed in order to expedite its incorporation into the SIP. 

• State proposes trading rule and solicits public comment. The air agency would also move 

forward with publishing its notice of proposed rulemaking, consistent with the state’s 

requirements. Once published, a public comment period would begin. A typical public 

comment period is 30 days; however, it may be possible to reduce the comment period to as 

little as 15 days under some circumstances.31 We believe that a state air agency could 

complete these steps in about one month. 

• EPA reviews proposed trading rule. The EPA Region would begin its formal review of the 

trading rule as soon as it receives the state’s SIP submission. EPA’s review and the 

subsequent publication of a notice of proposed rulemaking in the Federal Register would 

occur while the state was accepting public comments on its notice of proposed rulemaking 

and addressing any comments received. Because the EPA Region would have reviewed the 

draft through the interagency consultation process, the EPA Region should be able to 

complete its review of the submission quickly and prepare its notice of proposed rulemaking. 

We believe that an EPA Region could complete these steps in as little as one month if the 

state’s rule closely follows the model rule and if the air agency thoroughly addressed 

comments offered by the Region during the interagency consultation process. If, however, 

the submission does not closely follow the model rule or if the Region’s comments were not 

thoroughly addressed, these steps could take three months or more. 

• EPA proposes approval of the trading rule. The EPA Region would then publish the 

notice of proposed rulemaking in the Federal Register. The publication of the notice would 

start a public comment period. A typical public comment period is 30 days; however, it may 

be possible to reduce the comment period to as little as 15 days under some circumstances. 

The EPA Region could complete these steps in about one month. 

 

31Requirements for public hearings on SIPs can be found at 40 CFR 51.102. Section 51.102(g) allows a state to shorten 

its public comment period if it submits a written application to EPA in advance. 
59

• EPA addresses comments and prepares final approval. At the close of the comment

period on EPA’s notice of proposed rulemaking, the EPA Region would address any 

comments received and could draft the Federal Register notice finalizing the approval of the 

trading rule; however, EPA cannot publish this final rulemaking notice until the state 

completes its rulemaking process and submits the adopted rule to EPA. We believe that the 

EPA Region could respond to any comments and draft the final rulemaking notice in about 

one month. 

• State prepares final rulemaking package. By this time the state’s public comment period 

would have closed. The state air agency would address any comments received and prepare 

its final rulemaking package, making any changes in the rule that are necessary to address any 

comments that are received. These actions would take about one month. It must be noted that 

if the state needs to make a significant revision to its trading rule, the EPA Region would not 

be able to complete its rulemaking through parallel processing because the state’s final rule 

would not be consistent with the rule that EPA had proposed for approval. 

• State review, if required. At this point some states may be required to submit the final rule 

for review within the state before submission to EPA for final approval. These reviews may 

be carried out by the state legislature, the Governor’s office or other body established by the 

state. The length of these reviews varies greatly. In most cases these reviews either are not 

required or last less than six months. However, in some states the review can add up to 18 

months to the process, particularly in cases where review is required by the state legislature 

and the rule is completed just after the end of one legislative session.

• State submits adopted rule for EPA approval. After any required state-level review is 

completed, the air agency would address any comments that resulted from this review 

process. The air agency would also complete the state rulemaking process which may involve 

steps such as publishing a final rulemaking notice. The state would then submit the final SIP 

package to the EPA Region for final approval. We believe that these tasks can be completed 

in about one month. 

• EPA finalizes approval. The EPA Region would then complete its final rulemaking notice 

and have the notice published in the Federal Register. This step could take one month or 

perhaps less. EPA’s final action would be effective 30 days after publication. If EPA 

approves the SIP and once EPA’s rulemaking action is effective, the MPO(s) may use the 

trading rule in conformity determinations. No further rulemaking by the state or EPA would 

be necessary to allow trades to occur.

B.4 Has any state adopted a trading mechanism into its SIP this quickly?

Yes. The following timeline from Utah’s experience illustrates how quickly a trading 

mechanism can be adopted into a SIP. In this case, the trade was between pollutants rather than 

between emissions sectors. The fact that the trading mechanism was critical for the area to 
60

demonstrate conformity meant that all of the involved agencies worked quickly to reach resolution: 

• In early January 2002, the MPO for Salt Lake City, Utah, recognized that it would not be able 

to pass the NOx budget in its PM10 SIP in its next conformity determination that was required 

in July 2002. The MPO knew that it would be able to easily pass the PM10 budget in the SIP. 

Through interagency consultation, it was decided that the state and EPA would work together 

to quickly develop and approve a SIP trading mechanism that would allow the area to trade 

emission reductions from its PM10 budget to its NOx budget as allowed by 40 CFR 93.124(b). 

• In early January, Utah and EPA began drafting the trading rule and supporting information. 

By early February, the initial language for the trading rule and supporting information had 

been completed. In early March, the regulatory language and supporting information was 

finalized. 

• On March 15, the Governor of Utah submitted the proposed trading rule to EPA Region 8 and 

asked that parallel processing be used to approve the rule. 

• On April 1, the Utah Air Quality Board (UAQB) proposed the trading rule and started a 30-

day public comment period. 

• On May 1, EPA Region 8 published a Federal Register notice proposing approval of the 

trading rule that started a 30-day public comment period. 

• On May 13, the UAQB adopted the trading rule and submitted the adopted rule to EPA 

Region 8 for final approval. 

• On July 1, EPA Region 8 published a Federal Register notice approving the trading rule into 

Utah’s SIP.

• On July 31, EPA’s approval became effective and the MPO was then able to use the trading 

rule in its pending conformity determination.

The entire process from the time that it was recognized that a trading rule was needed to the 

time that EPA’s approval of the rule became effective was just under seven months. While the 

specifics of the trading rule developed for Salt Lake City are different than a trading mechanism for 

nonroad retrofit projects, EPA believes that it would be possible to develop and approve such a 

trading mechanism in a similar amount of time.
61
62

APPENDIX C: 

Model Rule for Trading Emission Reductions from Nonroad 

Retrofit Projects for Transportation Conformity

Introduction

 In recognition of the importance of nonroad diesel retrofit projects and other mobile source 

emission reduction strategies, MAP-21 continues to direct states and MPOs to give priority to 

funding diesel retrofits and other cost-effective mobile strategies under CMAQ. The law also notes 

that states and MPOs continue to have final CMAQ project selection authority. Furthermore, any 

state that has a PM2.5 nonattainment or maintenance is required to invest a portion of its CMAQ 

funding on projects that reduce PM2.5 emissions and precursor emissions. 

This model rule establishes a trading mechanism that would allow emission reductions from 

nonroad retrofit projects that are eligible to be funded with CMAQ (23 U.S.C. 149(b)) to be used in 

transportation conformity. The model rule is intended to facilitate states’ adoption of this type of 

trading mechanism into their SIPs. States would need to modify this model rule to account for any 

new issues raised by including projects that may not be eligible for CMAQ dollars, as described 

further below. 

Once a trading mechanism is adopted by a state into its SIP, the state air agency, MPO, and 

other agencies as appropriate would follow its provisions each time the MPO wants to include the 

emission reductions from a new nonroad retrofit project (or set of projects) in a transportation 

conformity determination. 

 Appendix C is divided into two parts that follow a parallel structure. Part 1 provides 

background information for state and local agencies to consider for each section of the model trading 

rule. Part 2 provides the model rule itself that states can include in their SIPs. EPA developed the 

model rule based on existing laws and regulations. 

Part 1: Explanatory Notes for Using Model Trading Rule Language 

Section 1. Purpose

 The purpose of the model rule is to establish a trading mechanism that allows certain nonroad 

retrofit emission reductions to be used in transportation plan and TIP conformity determinations. 

Section 2. Definitions

 Examples of definitions that may be needed are listed, but all of them do not need to be 

included if they are defined elsewhere in the state’s regulations or if they do not apply (e.g., PM10

does not need to be defined if a state has no PM10 nonattainment or maintenance areas). At a 
63

minimum, the definitions of “CARB,” “CMAQ,” “EPA,” “nonroad retrofit project,” and “surplus” 

must be included. If you include a definition for a word or phrase that is defined in the conformity 

rule (40 CFR 93.101), your definition must be consistent with the definition found in that rule. 

Section 3. Applicability

(a) This model rule could be tailored to establish individual trading mechanisms for more than 

one nonattainment or maintenance area within a state. Section 3(a) is intended to ensure that 

the exchange of emission reductions occurs within the geographic area that the regional 

emissions analysis covers, rather than between areas covered by separate regional emissions 

analyses. We believe that this language will cover all possible jurisdictional cases, e.g., where 

there is one MPO in a nonattainment area, an MPO that has a donut area, multiple MPOs in an 

area, or a multi-state area.32 

 States can apply this model rule to one or more MPOs, simply by including the names of the 

MPOs within the model rule. However, states could also list the MPOs to which the model 

rule applies and refer to this list in subsequent sections of the model rule. A state may want to 

choose this approach to be consistent with other parts of its SIP, or simply because doing so 

avoids repetition of the list in multiple places throughout the trading rule. 

(b) As noted above, the model trading rule is intended to target retrofit projects that are eligible 

for CMAQ dollars. States would need to modify this model rule to account for any new 

issues raised by including projects that may not be eligible for CMAQ dollars. For example, a 

trading mechanism could also account for other retrofit projects that are funded or operated by 

a state or local transportation agency that may not be eligible for CMAQ dollars (e.g., 

retrofitting diesel mowing tractors that cut vegetation within the rights-of-way of roadway 

facilities). 

(c) This section allows agencies to specify which pollutants and/or precursors are covered by 

their trading rule (e.g. the rule for an ozone area could specify that it applies to NOx, VOC, or 

both). 

This section also states that the rule applies only to trades of the same pollutant or precursor. 

That is, the model trading rule does not provide for trading between pollutants or 

precursors.33,34

 

32Please refer to EPA’s guidance, Guidance for Transportation Conformity Implementation in Multi-jurisdictional 

Nonattainment and Maintenance Areas (EPA-420-B-12-046), for more information regarding how the conformity rule's 

requirements for conformity determinations apply in areas that contain more than one MPO, a donut area, parts of more 

than one state, or any combination. See www.epa.gov/otaq/stateresources/transconf/regs/420b12046.pdf . 33 If your SIP allows trading between pollutants and/or precursors that will be included in the retrofit trading rule, you 

will need to delete the sentence in Section 3(c) that says, “This rule applies only to trades of the same pollutant or 

precursor” and add a sentence similar to the following: “This rule does not interfere with [name of state regulation] 

which provides for trading between [insert pollutants/precursors].” 34 If you are interested in allowing inter-pollutant or precursor trading for conformity purposes, you will need to do so 

within the SIP. Note that you would need to develop an appropriate trading ratio based on a technical justification and 

consider other factors as appropriate. Please consult your EPA Region if you intend to add inter-pollutant/precursor 

trading to your SIP. 
64

Section 4. Applying Emission Reductions from Nonroad Retrofit Projects in Transportation 

Conformity Determinations

(a)(i) The interagency consultation process in the transportation conformity (40 CFR 93.105) would 

be followed for each nonroad retrofit trade. This part of the model trading rule would require 

the MPO, state department of transportation, other state and local transportation agencies 

(when appropriate), and the state air agency to consult on trades. Individual states can further 

clarify which agencies should be involved in their consultation process, and make any further 

modifications as appropriate. 

(a)(ii) This section specifies that the MPO and the state air quality agency must agree on the quantity 

of emission reductions from a nonroad retrofit project, or set of projects, that can be used in 

conformity. The MPO and state air quality agency must work together for a trade to occur 

because each agency is responsible for part of the process. MAP-21 directs states and MPOs 

to give priority to projects that reduce PM2.5 emissions, including diesel retrofits, in areas 

designated nonattainment or maintenance for PM2.5 (23 US.C. 149(g)(3)). These projects may 

include both nonroad and on-road diesel equipment that are operated on highway construction 

projects within PM2.5 nonattainment and maintenance areas (23 U.S.C. 149(k)(2)). 

Ultimately, the state DOTs and MPOs decide how to spend the CMAQ money they receive, in 

accordance with the CMAQ provisions of MAP-21. On the other hand, the state air agency is 

responsible for determining which emission control programs an area needs to meet its Clean 

Air Act obligations. The MPO and the state air quality agency must decide together how 

much of the emission reductions from a nonroad retrofit project or set of projects are 

appropriate to use in conformity. These two agencies would make a decision for each project 

or set of projects being considered for transportation plan and TIP conformity determinations. 

State air quality agencies and MPOs need to consider the area’s air quality needs when 

deciding how much of the emission reductions from a nonroad retrofit project is appropriate 

to use in conformity. For example, in the time period before a nonattainment area has an 

attainment demonstration, it may be appropriate to reserve some of the emission reductions 

generated by a nonroad retrofit project to help demonstrate attainment. Or, a state may decide 

to reserve some of the emission reductions for improving air quality, regardless of whether or 

not the attainment demonstration is in place. The state air agency and MPO could also decide 

that all of the emission reductions from a nonroad retrofit project can be used in the 

conformity determination. Whatever the case, the state air agency would document its 

concurrence in a letter to the MPO, which would describe the surplus reductions that are 

available for transportation conformity. 

(b)(i) In order for emission reductions from a nonroad retrofit project to be estimated, 

NONROAD/NMIM would need the number of vehicles/engines/equipment being retrofitted, 

the vehicle/engine/equipment type and class being retrofitted, vehicle/engine/equipment 

model years, the retrofit technology being applied, the activity level of the 

vehicles/engines/equipment that are used (e.g., hours of usage), and when the retrofits will be 

implemented. This section requires an MPO to describe the details of the project. While an 
65

MPO may not know all of this information with complete certainty, it should know enough 

about the project to make reasonable assumptions. 

(b)(ii) The model rule relies upon the transportation conformity rule’s requirements for ensuring that 

emission reductions from retrofit projects have sufficient commitments before they are 

accounted for in a regional emissions analysis. For example, retrofit projects that result from 

a state or local regulation or ordinance could be included in a conformity analysis once such 

a regulation or ordinance is adopted (40 CFR 93.122(a)(3)(i)). Conversely, a retrofit project 

that does not require a regulatory action to be implemented would meet this requirement if it 

is included in the transportation plan and TIP with sufficient funding and other resources for 

its full implementation. See Section 4.3 of this guidance for further information on what 

level of commitment is necessary to include retrofit reductions in a transportation conformity 

determination. 

Whatever the case, once an entity (e.g., an owner or operator of nonroad equipment or 

vehicles) provides a commitment for implementing a nonroad retrofit project and the MPO 

relies on it in a conformity determination, it is an enforceable obligation. That is, under the 

existing provisions of the transportation conformity rule, an entity that makes a written 

commitment is subject to civil action if the entity does not fulfill its commitment.

(b)(iii) - (b)(v) These paragraphs are similar to the conformity rule’s requirements for any control 

measures that are relied upon in a conformity determination. 

(c) Emission reductions must be quantified using the latest assumptions available at the start of 

the regional emissions analysis (40 CFR 93.110). The consultation process would be used to 

evaluate and choose the model(s) and associated methods and assumptions to be used (40 

CFR 93.105(c)(1)(i)). If the emission reductions are calculated using a method that relies on 

inputs such as temperature that were also used for developing the budgets in a SIP, these 

factors must be consistent with those used to establish the SIP as required in 40 CFR 

93.122(a)(6). Quantification methods and information on the efficacy of retrofit technologies 

are addressed in more detail in Section 2 of this guidance document. 

(d) This requirement for documentation is similar to the conformity rule’s requirements for 

documenting the transportation plan, the TIP, and any control measures that are included in 

the regional emissions analysis of a conformity determination. The MPO would document in 

its conformity determination that the state air agency has concurred on the traded nonroad 

retrofit emission reductions. This documentation could be completed by referencing the state 

air agency’s concurrence letter in the transportation plan/TIP conformity determination. 

(e) In subsequent determinations, the MPO and state air agency would follow the consultation 

procedures in 40 CFR 93.105, but would not have to renegotiate the amount of available 

emission reductions from a nonroad retrofit project that has already been traded for a given 

year of the regional transportation conformity analysis. However, the MPO must recalculate 

the emission reductions that result from the project in subsequent conformity determinations. 

The MPO would also cite and/or include the previous air agency concurrence letter in its new
66

conformity determination.

For example, suppose an area that is nonattainment for the 2008 ozone NAAQS has a trading 

mechanism in place, and the MPO is determining transportation plan/TIP conformity in the 

year 2015. The MPO determines that a new nonroad retrofit project reduces NOx by 5 tons 

per day in 2015 and 2 tons per day in 2020. After discussion in the interagency consultation

process, the MPO and state air agency agree that these reductions are surplus, and the MPO 

can use some of the reductions in the years 2015 and 2020 of the regional emissions analysis

for the transportation plan/TIP conformity determination. Specifically, in this example, the 

MPO and state air agency agree that the following reductions can be used for conformity 

purposes: 3 of the 5 tons per day of NOx reductions for the 2015 conformity analysis year 

and all 2 tons per day of NOx reductions for the 2020 conformity analysis year. 

The next time the MPO does transportation plan/TIP conformity, the MPO re-calculates the 

retrofit project’s reductions based on the latest models and assumptions, and it is found that 

the project reduces emissions by 6 tons per day in 2015, and 3 tons per day in 2020. In this 

example, the MPO can continue to use up to 3 tons per day of reductions in 2015 and up to 2 

tons of reductions in 2020, based on the previous trade for this nonroad retrofit project. If 

additional reductions are needed from this project for any years, then the trading mechanism 

would need to be used to conduct a new trade. 

As with any control measure that an MPO includes in its conformity determination, the MPO 

can only use the emission reductions from the project, or part of the project that is actually 

occurring. If the nonroad project’s implementation is delayed, the MPO cannot include 

emission reductions from the project until its implementation is assured. 

Section 5. Prohibition on Double-Counting

This section is intended to ensure that there is no double-counting of emission reductions that have 

already been used in a transportation conformity determination or in meeting any other Clean Air 

Act purpose. The best way to ensure this is to require that the impact of any trades be accounted for 

in any subsequent inventory analyses that are done. For example, if the application of this rule 

results in a decrease in the nonroad emissions inventory and an increase in the allowable on-road 

emissions, future SIP inventories or regional transportation conformity analyses should reflect those 

changes as appropriate.
67

Part 2: Model Trading Rule

Section 1. Purpose

 This rule establishes the procedures that may be used to trade emission reductions from 

nonroad retrofit projects, as defined below, to the transportation sector for the purpose of 

determining conformity of a transportation plan or transportation improvement program. 

Section 2. Definitions 

 The following definitions apply to this rule: 

• CARB means the California Air Resources Board.

• CMAQ means the Congestion Mitigation and Air Quality Improvement Program, as defined in 

title 23, U.S.C. 

• EPA means the U.S. Environmental Protection Agency. 

• Nonroad retrofit project, for the purpose of this rule, means an undertaking to reduce 

emissions from nonroad vehicles or engines as described by 23 U.S.C. 149(b), below the 

emissions level which is currently required by EPA regulations at the time of vehicle or 

engine certification. For the purposes of this rule, such an undertaking must apply a 

technology verified by EPA, CARB, or other entity recognized by EPA for verifying retrofit 

technology, use an EPA-certified engine replacement or early replacement of older vehicles 

or equipment with cleaner vehicles or equipment; and it must be eligible for funding under 

CMAQ.

• NOx means oxides of nitrogen. 

• PM10 means particulate matter that is less than or equal to 10 microns in aerodynamic 

diameter.

• PM2.5 means particulate matter that is less than or equal to 2.5 microns in aerodynamic 

diameter. 

• Surplus means that emission reductions are not otherwise relied on to meet any Clean Air Act 

air quality related purpose including but not limited to reasonable further progress, 

attainment, maintenance, or requirements adopted to satisfy Clean Air Act section 

110(a)(2)(D). In the event that a nonroad retrofit project is relied on to meet such an air 

quality requirement, emission reductions are no longer surplus and may not be used in 

transportation conformity determinations. 

• VOC means volatile organic compounds. 
68

Section 3. Applicability

(a) Geographic applicability: This trading rule applies to the geographic area covered by the 

regional emissions analysis done for a transportation conformity determination for a transportation 

plan or transportation improvement program in [insert name of nonattainment or maintenance area]. 

(b) Project applicability: This trading rule applies to nonroad retrofit projects as defined in 

Section 2 of this rule. 

(c) Pollutant applicability: This trading rule applies to the following pollutants/precursors: 

[insert pollutants/precursors; for precursors indicate for which pollutant and standard(s)]. This 

rule applies only to trades of the same pollutant or precursor. 

Section 4. Applying Emission Reductions from Nonroad Retrofit Projects in Transportation 

Conformity Determinations

Before [insert name of MPO] can include emission reductions from a nonroad retrofit project(s) in a 

transportation conformity determination, the steps in paragraphs (a) – (d) must be completed. 

(a) Interagency Consultation. 

(i) [Insert name of MPO], [insert name of state department of transportation], [insert names of 

other state and local transportation agencies, when appropriate] and [insert name of state air 

agency] shall follow consultation procedures in [insert “40 CFR 93.105” or state transportation 

conformity SIP if one has been approved by EPA] throughout the implementation of this rule. 

(ii) [Insert name of MPO(s)] and [insert name of state air agency] must concur on the amount of 

emission reductions from a nonroad retrofit project(s) that can be used in the transportation 

conformity determination. [Insert name of state air agency] will document this concurrence in a 

letter to [insert name of MPO]. Concurrence of [insert name of state air agency] also affirms 

that the emission reductions are surplus and therefore available for the transportation conformity 

determination.

(b) Description of the Nonroad Retrofit Project(s). 

(i)[Insert name of MPO] must fully describe each nonroad retrofit project being relied upon in a 

conformity determination, including the number of vehicles/engines/equipment being retrofitted, 

the vehicle/engine/equipment type and class, vehicle/engine/equipment model years, the retrofit 

technology being applied, the activity level of the vehicles/engines/equipment, and the 

implementation schedule of the nonroad retrofit project. 

(ii) [Insert name of MPO] must provide assurance that the nonroad retrofit project is enforceable 

by ensuring that any nonroad retrofit project under this rule meets the requirements of 40 CFR 

93.122(a); 

(iii) [Insert name of MPO] must provide assurance that the nonroad retrofit project has adequate 
69

funding and resource commitments to ensure that emission reductions from the nonroad retrofit 

project will occur in the years of the regional emissions analysis when emission reductions will 

be used; 

(iv) [Insert name of MPO] must provide assurance that the nonroad retrofit project is on 

schedule and that the retrofitted vehicles, engines, or equipment will remain in use within the 

nonattainment or maintenance area in the years of the regional emissions analysis when the 

emission reductions will be used; and 

(v) [Insert name of MPO] must provide assurance that emission reductions will be based only on 

activity that occurs within the geographic area covered by the regional emissions analyses. 

(c) Calculation of Emission Reductions. For each year of the regional emissions analysis in which 

emission reductions from the nonroad retrofit project(s) will be applied, [insert name of MPO] and 

[insert name of state air agency] must calculate emission reductions from the nonroad retrofit 

project(s) using:

(i) the latest EPA-approved emissions model or other method as determined through the 

interagency consultation process required by 40 CFR 93.105; 

(ii) data and assumptions consistent with requirements for use of latest planning assumptions 

under 40 CFR 93.110, including, but not limited to current data or future projections of numbers 

and types of nonroad vehicles/engines/equipment being retrofitted, and current data or future 

projections of hours of use for those vehicles/engines/equipment within the nonattainment or 

maintenance area; 

(iii) the latest verified information available regarding the efficacy of the nonroad retrofit project 

as provided by EPA and/or CARB; and 

(iv) ambient temperatures and other relevant factors consistent with those used to establish the 

motor vehicle emissions budgets (if they exist) in the applicable implementation plan, as required 

by 40 CFR 93.122(a)(6), if a method is used that requires such factors as inputs. 

Once total emission reductions from the nonroad retrofit project(s) are calculated, [insert name of 

MPO] can use no more than the amount of emission reductions determined in Section 4(a)(ii) to be 

available for the conformity determination. 

(d) Documentation. [Insert name of MPO] must document in the transportation conformity 

determination how steps (a) through (c) of this section have been satisfied, consistent with the 

transportation conformity regulations at 40 CFR Parts 51 and 93. 

(e) Subsequent conformity determinations. Once emission reductions from a nonroad retrofit 

project(s) have been used in a conformity determination, [insert name of MPO] can include emission 

reductions from those projects for the same analysis years in a subsequent conformity determination 

without repeating paragraph (a)(ii), provided [insert name of MPO] meets all other requirements of 

Section 4 of this rule. 
70

Section 5. Prohibition on Double-Counting

Once the emission reductions of the nonroad retrofit project(s) are included in a transportation 

conformity determination, those specific reductions are no longer surplus and therefore no longer 

available as new reductions for meeting any Clean Air Act air quality related purpose, including but 

not limited to, reasonable further progress, attainment, maintenance, or requirements in Clean Air 

Act section 110(a)(2)(D). Any emissions inventory created after a trade must properly account for 

the emission impact of the trade.